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The S&P GSCI, the broad commodities benchmark, rallied 5.8% in October. Performance was solid across sectors, with energy-related commodities continuing to outperform and grains and metals regaining some of their recent weakness. With two months of the year remaining, the S&P GSCI is up 46.3% YTD, the index’s best performance over the first 10 months of a calendar year in its 30-year history.

Natural gas prices in Europe and coal prices in China lost some of their lusters in October, with countries intervening after record price spikes in September. The S&P GSCI Natural Gas fell 10.0%, as Russia came to the rescue promising more exports to Europe. The S&P GSCI Petroleum continued higher by 9.7%, almost matching the prior month’s strong performance. A perfect storm of catalysts from delayed production increases, strong global demand, and logistics issues were still very much in play in global energy markets.

Most commodities within the agriculture space rallied in October, with the S&P GSCI Agriculture ending the month 3.6% higher. The S&P GSCI Kansas Wheat jumped 7.4% over the month. Strong import demand, poor spring wheat harvests, and an export duty imposed by Russia have heightened expectations of relatively tight global wheat supplies this season. For the second consecutive month, S&P GSCI Cotton was the best performer in the agriculture complex, rallying 8.6%. The rally has been fuelled by optimist estimates of demand, as consumers emerge from COVID-19 restrictions, while the overall harvesting pace for the U.S. crop has been slowed by various forms of weather adversities and maturation rates.

The S&P GSCI Livestock fell 1.5% in October, with lean hog prices tumbling. Hog supplies in the U.S. continue to greatly outpace demand. U.S. pork exports to China have fallen for the last three months, while record pork prices in the domestic market are having a negative impact on per capita consumption.

Most industrial metals charged higher in October, while the S&P GSCI Aluminum was the only one to cool off by 4.9%, but it still showed a sector-best 34.4% YTD performance. The remaining major LME-traded industrial metals rose each by at least 7.0%. The S&P GSCI Zinc hit a 14 year high after major smelters around the world cut output on the back of higher power costs. The S&P GSCI Lead lagged the other industrial metals YTD, but lead the way in October by rising 15.2%.

Gold enjoyed a modest revival in October, with the S&P GSCI Gold gaining 1.5%. After lagging other inflation-sensitive assets for most of 2021, and with inflation showing few signs of abating, market participants may be reassessing their gold positions. On the flip side, while gold is considered an inflation hedge, reduced stimulus and interest rate hikes would likely push government bond yields and the U.S. dollar up, denting non-yielding gold’s appeal.