Commodities that are not agriculture products tend to be storable and hedges against inflation. How about the agriculture products? The return is still positive or negative with inflation?
It depends on its demand relative to economic activity. That’s all I know
most foods are staples --> not cyclical --> not good inflation hedge industrial metals, storable energy are cyclical --> better inflation hedge NB measure correlation to UN-expected inflation, since expected inflation is already built in to asset prices (via discount rate), futures prices (via RFR), etc
Slash Wrote: ------------------------------------------------------- > It depends on its demand relative to economic > activity. That’s all I know It should depend more on supply than on demand. For agricultural comodities, demand is more inelastic, supply may depend on other factors ( ie weather) you can’t really make a correlation between inflation and agricultural comodities - although inflation would erode profits so generally I would say negative
There was a very good thread on the same topic few days back. http://www.analystforum.com/phorums/read.php?13,932731