London (Platts)--28Jan2011/736 am EST/1236 GMT
Investment in commodity assets ended 2010 with almost a 40% increase on the year to $376 billion, with December registering the strongest gain in capital inflows, investment bank Barclays Capital said in a research note. In the last month of 2010, $10.9 billion was invested in commodity assets, the highest level since February 2009, the bank said. Precious metals was the sector that received the biggest share of investments last year, with $23.6 billion, followed by energy ($20.4 billion), agriculture ($12.2 billion) and base metals ($6.7 billion), Barclays said. The bank stated in the research note that it expects agriculture to be the best-performing sector over the next month, supported by corn and wheat. "Agricultural commodity markets have been strong performers so far this year and we are continuing to hold our long corn recommendation. Although corn prices have risen by almost 25% from their low point in November 2010, we see further upside after additional big downward projections to 2010-11 harvests in both the US and Argentina," it said. On the wheat side, Barclays said a key issue is that of quality of the harvest. "Bad weather in Australia has reduced [wheat crops] to animal feed grade...and in the US winter plantings of higher grade wheat have expanded surprisingly modestly...There are also concerns over the impact of drought in China [and] although Russia's spring wheat planting is likely to increase, it may not offset losses already incurred due to drought," it said.--Guilherme Kfouri, guilherme_kfouri@platts.comSimilar stories appear in Energy Trader. See more information at http://bit.ly/EnergyTrader