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Why oil is rising, gold is falling and crops are wilting

The DJ-UBS commodity index suffered its first month of selling since last November. It was largely driven by weakness in agriculture commodities and precious metals. WTI crude rose as US demand increased and inventories at Cushing dropped to the lowest level since 2008.

Arabica coffee has been the biggest climber this year but the biggest loser in May as the Brazilian coffee harvest began and production levels were estimated to be higher than originally feared. The key crops of corn and especially wheat ran into heavy selling during May as planting progressed at a strong pace and favourable weather across the northern hemisphere raised the spectre of a bumper crop.

Gold continued its fall from grace, losing more than 3 percent in May. Just as equity markets continue to put in a strong performance, it's reduced the need for alternative investments in portfolios.

01:56 minutes
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