Commodities were higher in February, with many commodities supported by positive macroeconomic data.

Nelson Louie, Global Head of Commodities in Credit Suisse's Asset Management division, said, "Commodities were generally supported by an improved macroeconomic environment in February.  The economic data released towards the end of the month highlighted continued gradual improvement in global growth momentum, which is supportive of future commodity demand.  Commodity markets remain susceptible to global supply shocks, especially in the case of petroleum.  Global oil supply and demand balances are significantly tighter than most had anticipated due to rising Middle East tensions and tighter sanctions, production disappointments, labor strikes and production shutdowns." 

Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added, "While the economy is improving, we believe the US Central Bank will be in no hurry to raise rates and possibly choke the budding recovery.  With inflation expectations remaining well anchored, the odds of inflation overshooting expectations remain elevated.  Commodities have historically tended to outperform during periods of higher than expected inflation.  We believe investors will continue to benefit from the inflation protection and diversification potential of holding diversified commodities exposure within a portfolio of traditional assets." 

The Dow Jones-UBS Commodity Index Total Return was up by 2.70% in February.  Overall, 14 out of 20 index constituents increased in value.  Energy was the best performing sector, up 4.87% for the month. Petroleum led the sector higher due to improved economic sentiment and increasing political tension in the Middle East, further constricting excess production capacity.  Colder weather in Europe helped to counter what had thus far been a warm winter, increasing petroleum demand.  Agriculture increased, up 3.53%.  While Sugar and Soybeans were the best performers in the sector, Corn was also supported by strong weekly USDA export sales data.  Livestock ended the month up a relatively modest 0.81%, led higher by Cattle.  Tight inventory levels have constrained supply, despite higher wholesale beef prices.  Industrial Metals also increased slightly, up 0.79%, with mixed performance among constituents.  Aluminum and Copper posted strong gains, while Nickel was sharply lower.  Aluminum delivered the greatest individual return as smelters are dealing with continually increasing energy costs.  Precious Metals was relatively unchanged, down 0.35%.  Gold had a strong month, supported by continued accommodative monetary policies globally.  However, speculation that a stronger-than-expected US economy might alter the Federal Reserve's policies supported a stronger US dollar and had an outsized impact on Gold."