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Commodity Index, Tech Guy Comments & Rain Days Update 03/27/2022

A commodity index is an investment vehicle that tracks the price and the return on investment of a basket of commodities. These indexes are traded on various exchanges.

There are mutual funds of various commodity indexes. The most popular commodity index is the Commodity Research Bureau (CRB) Index. It is a daily indicator of global commodity markets.

The CRB Index is made up of 19 commodities:

39% of which are energy contracts

41% to agriculture

7% to precious metals

13% to industrial metals

The CRB is designed to isolate and reveal the directional movement of prices in overall commodity trades.

After the Great Depression in the 1930s, trading activity in stocks, bonds, and commodity futures was beginning to show some life. However, traders of commodities found very few sources of comprehensive information were available.

A journalist, Milton Jiler, founded the Commodity Research Bureau, with the Futures Market Service as its first publication. He felt traders needed something that better reflected the overall price activity in the commodity markets rather than individual commodities which had very few contracts traded through the day.

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