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Economy in Brief

Commodity Prices Broadly Higher
by Tom Moeller March 7, 2005

The JoC-ECRI (Journal of Commerce-Economic Cycle Research Institute) index of industrial commodity prices surged in three out of the last four weeks. The gains lifted the latest reading 2.7% above the February average though the y/y gain was a low 1.2% due to pricing strength this time, last year.

During the last ten years there has been a 45% correlation between the JoC-ECRI commodity price index and the six month change in factory sector industrial production.

Petroleum prices were up 8.9% last week versus February as a 10.4% rise in crude oil prices to $52.70 bolstered a 3.0% (43.8% y/y) increase in the price of benzene.

Textile prices finally showed some lift and were 2.7% higher versus February led by a 9.7% jump in the price of cotton (-29.5% y/y). Lumber prices also rose a strong 4.4% (9.8% y/y) and prices for lengths of structural composite jumped 6.6% (-21.3% y/y).

Metals prices rose 1.8% in the latest week versus February. Higher aluminum prices led the strength with a 3.1% rise versus last month (15.0% y/y) and zinc prices also surged 3.8% (20.3% y/y).

The KR-CRB (Knight Ridder-Commodity Research Bureau) commodity price index also rose the first of March by 1.6% versus February and it rose further during last week. The index differs from the JoC-ECRI version in that roughly half of the weighting reflects agricultural prices. The latest gains reflect higher prices for foodstuffs (-11.6% y/y) which have offset lower livestock prices (-5.7% y/y).

JoC-ECRI Industrial Price Index 03/04/05 12/31/04 Y/Y 2004 2003 2002
All Items 116.00 111.60 1.2% 112.78 91.97 79.53
   Textiles 67.00 64.40 -3.0% 65.83 65.09 59.73
   Metals 125.60 124.60 6.2% 118.15 84.57 75.14
   Miscellaneous 104.40 103.90 -15.6% 114.03 102.89 85.81
   Petroleum 264.40 216.50 53.5% 207.13 135.26 110.06
KR-CRB Spot Commodity Price Index 03/01/05 12/28/04 Y/Y 2004 2003 2002
All Commodities 294.44 293.42 -2.4% 293.42 282.59 244.31
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