Continuous Commodity Index

The Continuous Commodity Index ( CCI, also called " Old CRB Index") is a commodity index that includes 17 different futures, which are traded on commodity futures exchanges. He was first calculated in 1957 by Commodity Research Bureau ( CRB) in the U.S. and is listed on the exchange ICE Futures U.S.. The CCI is not to be confused with the Thomson Reuters / Jefferies CRB Index ( TRJ / CRB Index). The original CRB index was introduced in 1957 and renamed the Continuous Commodity Index 2005.

Concept

The Continuous Commodity Index ( CCI) was introduced in 1957 by Commodity Research Bureau under the name CRB Index and has since been rebuilt several times. He initially contained 28 components, their number decreased to 1995 17 For each raw material went into the calculation is the average of futures prices of several due dates one. Until 1987, all futures due annually were used. A change in the composition was as soon as a contract with maturity was come in one year and was eliminated from the index at different intervals depending on the raw material of the next contract. From 1987, the calculation based on the futures of the next nine months, and from 1995 on the futures of the next six months was referring. 2001 changed its name to "Reuters CRB Index" and on 20 June 2005 a new renamed " Continuous Commodity Index" ( CCI).

The current commodity index, which bears the name of CRB index is not comparable with the historical CRB index. In 2005 he was fundamentally revised, as its traditional calculation method was no longer current. The original CRB Index running ever since under the name of Continuous Commodity Index on. The Commodity Research Bureau developed the current CRB index together with the companies Reuters and Jefferies & Company. Since 2009, the index the name " Thomson Reuters / Jefferies CRB Index" bears ( TRJ / CRB Index ), to reflect the merger of Reuters and the Thomson Corporation on the media group Thomson Reuters on April 17, 2008. The CRB Index is an arithmetic goods price index, which includes 19 different commodity futures. The CCI ( " Old CRB Index") is, however, a geometric goods price index, which covers 17 commodities.

The CCI is considered an indicator for the future development of inflation or the cost of development in the industry. He is at a turning point in the commodities market is a good leading indicator for the bond market, as raw materials in their tendency towards the bonds generally have a lead time of three to six months. Between the interest on the bonds and commodity prices (CCI ) is also a close temporal connection. Correlations of the CCI with the geometrically weighted U.S. dollar index and the trade-weighted Trade Weighted U.S. Dollar Index can be seen. A falling U.S. dollar is equivalent to inflationary tendencies and tend to rising commodity prices. This is especially true for agricultural commodities and the price of oil.

Composition

The first CCI ( Old CRB Index ) from 1957 contained 28 components that were each weighted geometric ( respectively 3.57 percent). The Continuous Commodity Index ( CCI) has existed since 2005 from 17 equally weighted commodities (each 5.88 percent), which are divided into five categories. Compared to the Thomson Reuters / Jefferies CRB Index ( TRJ / CRB Index ), the energy sector has a low weight. In contrast, precious metals, but especially the agricultural sector, more present. Both together have a share of more than three quarters of the total index.

The following overview shows the raw materials, their weightings in the index and the exchange on which the futures are traded.

History

Historical Overview

The index was launched in 1957 under the name " CRB Index" and was back-calculated to 4 September 1956. From 1957 to 1972, the index remained in a trading range 95-115 points. On 9 August 1968, obtained with 95.20 points, a record low.

In the 1970s there was stagflation in developed countries with high inflation, weak economic development, low productivity and high unemployment. This period was characterized by a large uncertainty in the financial world oil crisis, a sharp increase in U.S. government debt, a massive expansion of (paper) money supply and a flight of investors in property values ​​. Until 20 November 1980, the CRB index rose to a record high of 337.60 points. Since the all-time low of 1968 corresponds to an increase of 254.6 percent.

As of 7 November 2001, the commodity index fell to a low of 182.83 points. Since the peak in 1980, this represents a decrease of 45.8 percent. In the following years, the index was due to a huge demand for raw materials in the People's Republic of China and India sharply.

In 2001 a name change to "Reuters CRB Index" and on 20 June 2005 a new renamed " Continuous Commodity Index" ( CCI).

On 29 January 2008 the index for the first time overcame the limit of 500 points. Until 3 July 2008, the CCI rose to a high of 615.04 points. Since November 2001, this represents an increase of 237.9 percent.

In the course of the international financial crisis in the U.S. subprime crisis had its origins in 2007, the index began to decline. 2008, the financial crisis had an increasing impact on the real economy. Due to a decline in global demand in the commodity markets were held, primarily from the beginning of the fourth quarter of 2008 strong price declines. On 5 December 2008, the CCI fell 322.53 points to its lowest level since 2005. Since July 2008, this represents a decrease of 47.5 percent. That is the biggest downfall in the history of the index. The December 5, 2008 marked the end of the descent. From the end of 2008, the CCI was back on the way up.

On 20 April 2011 the CCI marked with a final score of 691.09 points, an all time high. The December 2008, an increase of 113.6 percent. Was particularly strong rise in the prices of agricultural commodities. Especially meat, cereals, sugar and oils and fats prices rose since mid-2010. Reasons several factors are called (rising world population, growing money supply, speculation on agricultural markets, crop losses due to natural disasters, export restrictions in some countries ). Consequences of high commodity prices are rising inflation and the outbreak of unrest in parts of the world.

Annual development

The table shows the annual high, low and closing levels of the Continuous Commodity Index ( Old CRB Index ) since 1956.

¹ December 31, 2012

201228
de