Despite High-Flying Oil Prices, Commodities as a Whole Aren't Expensive

The crude oil bulls have likely gotten a little ahead of themselves, but traders should recognize that despite high-flying oil prices the commodity complex is still relatively cheap. There are a handful of commodity index sources available, most of which overweight oil causing them to appear inflated at the moment, but a quick look at the better diversified Bloomberg DJ-UBS index, suggests commodities appear to be relatively attractively priced. Thus, perhaps the best plays on the board in 2018 will be those which cater the upside in the likes of agriculture, industrial metals, meats (cattle and hogs), and perhaps even natural gas.

The Bloomberg DJ-UBS commodity index is hovering near 87.00. To put this into perspective, the index peaked near 140.00 in 2014 and at the apex of the trough in 2016 was valued near 72.00. Although we are not necessarily calling for a return to the high-130.00s, it is reasonable to assume commodities have more room to move on the upside than they do to the downside....262 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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