The Rogers International Commodity Index® (“RICI®”) committee announces 2018 component changes!

At the annual committee meeting held in Zurich Switzerland, the committee made the following modification to the Index. These changes were based on discussions regarding world consumption patterns (and liquidity) which is the foundation of the methodology and a differentiating factor for the RICI®, a broad-based global commodity index:

The MGEX Hard Red Spring Wheat contract, a new component, was added at 1.0% bringing the total number of components to 38.  Hard Spring Wheat is higher in protein, is widely consumed, and its performance can vary widely at times from other wheat contracts.

The Euronext Milling Wheat contract was increased from 1% to 2%. This brings the weighting more in line with the levels of wheat consumed globally and priced overseas.

The CME Wheat contract was reduced 2% to a 2.75% weighting in order to make room for the Hard Red Spring and Milling Wheat increases. Overall, the Index maintains the same level of wheat exposure but with more diversification across contracts.

The NYMEX Natural Gas contract was raised 1% to 6% to reflect world-wide consumption patterns as Natural Gas continues to grow as a global energy source relative to oil. The Natural Gas weighting was last raised in 2014 and as these trends continue to unfold the committee deemed it appropriate to increase the weighting once more.

The NYMEX WTI Crude Oil contract was reduced 1% to allow for the Natural Gas increase which the committee believes is a better representation of the overall gradual changes in global consumption patterns.

The official press release can be found at the following:
https://www.prnewswire.com/news-releases/rogers-international-commodity-index-rici-composition-adjustments-300590040.html

Additionally, the MGEX Exchange issued their own press release upon the addition of the Hard Spring Wheat Contract to the RICI®, the first major commodity Index to add this contract.
http://www.mgex.com/documents/MGEXRelease020218.pdf

View the entire index weightings:
Click for index weightings PDF

For more information on the Rogers International Commodity Index®:
http://www.rogersrawmaterials.com/daily.asp

Alan Konn

Partner & Managing Director of Price Asset Management