The return of commodities

Commodity prices had a rough ride in 2009. The Dow Jones-UBS Commodities Index, a measure of global commodities prices, dropped to $99.30 in July 2009 from an all-time high of $238.20 in July 2008. The index was at $130.30 in December 2009, up approximately 15% year-to-date.

Trading companies do need price volatility, said Willem Klaassens, global head of commodity traders and agribusiness at Standard Chartered Bank. If there is a flat price they can't trade and they can't make money. Too extreme volatility however, is dangerous as well. He cited oils drop from around $140 per barrel in July...