Highlights

• The TDCI in U.S. dollars slid by 3.8% last week, driven by significant declines in energy and precious metals prices. Excluding energy, the index edged down only slightly, losing 0.2% on the week. The total index is down 50% from year ago levels, while the index excluding energy is down by a more modest 35%.

• Following six weekly gains, crude oil prices lost some steam last week, falling by 5%. An increased possibility of GM and Chrysler filing for bankruptcy and a build in U.S. inventories weighed on prices early in the week, pushing them below the US$50 per barrel mark. And despite a small rally on Thursday after the G20 meeting instilled some optimism in investors, another dismal U.S. employment report pressured prices down as the week came to a close, as fears of further demand destruction trickled into the market.

• Natural gas prices sank 7% last week as concerns of declining demand dominated the market. In Japan – the world’s largest LNG importer – two key importers stated that they will be reducing LNG purchases this year. With excess storage capacity, much of the surplus will likely be headed to the North American market.

• Precious metals also took a hit last week, as a rally in equity markets and speculation that the economy will improve reduced safe haven demand. Silver prices lost the most ground, falling by 5%, while gold prices shed a more muted 2%.

• Bucking the trend of the rest of the agricultural sub-index, wheat prices jumped 2.5% last week. Spillover from a rally in the soybean market and concerns about cold weather heading towards key wheat growing areas in the U.S. provided support to prices.

• Lumber prices were also up last week, rising by 2.1%. A seasonal uptick in demand coupled with lower supplies lead to reduced inventories. Still, with North American homebuilding activity at extremely low levels, any upward pressure on lumber prices is likely to be limited.