U.S. equity markets continued their march higher on Monday, as the Dow prepared to make a run at 10,000. But the story of the day was commodities, with most agricultural ETFs finishing sharply higher. The PowerShares DB Agriculture Fund (DBA) gained more than 4% as a tighter than expected supply report from the Agriculture Department sent prices for many foods higher.The more broad-based PowerShares DB Commodity Fund (DBC) also finished higher, up about 2%.
Separately, the Food and Agriculture Organization of the United Nations said that agricultural investment in developing countries will have to increase more than fivefold to ensure that by 2050 the world has enough to eat. FAO Director General Jacques Diouf told experts gathered in Rome that agriculture faces significant challenges from climate change, which is increasing the frequency of extreme weather events such as floods and droughts.
The iPath S&P 500 VIX Short-Term Futures ETN (VXX) found itself among the day’s biggest losers yet again. VXX dropped nearly 3.5% as expectations for future volatility in equity markets continued to decline. The fund closed at its all-time low (it was launched in January of this year) and has now declined for seven straight sessions, losing almost 13% over that period.
Disclosure: No positions at time of writing.