With many pundits coming out and saying we are already in recession, no need debating it – and the stock market sure acting like that is the case;  Soybeans up .86% yesterday reminds us that there is much more to that term ‘markets’ than just your grandfather’s stocks and bonds. There are grain markets like Soybeans, Corn, and Wheat, and soft commodity markets like Cocoa, Sugar, and Coffee. Just so happens that, while the world is pricing in a recession in stocks, not all commodity markets are pricing in a drop in demand.

Take a look at the moves of these markets in August.

Commodity	Aug MTD% Perf	% Down at Aug Low	%Gain since Aug Low
Corn	8.97%	-1.10%	11.03%
Wheat	12.80%	-2.38%	15.63%
Soybeans	3.15%	-5.54%	9.20%
Coffee	12.43%	-3.37%	16.35%
Sugar	6.17%	-11.51%	19.98%
Cocoa	4.35%	-5.45%	10.37%

We’re only too happy to see this from a managed futures standpoint. If you remember back to 2009 and some of 2010 – managed futures struggled with nearly all markets (yes, even Corn and Coffee) moving in tandem as one big risk on/risk off trade, with things rallying when it appeared the world economy was on the mend, and selling off when it appeared things weren’t so great. This created a problem for many managed futures programs who rely on market diversification as one of their risk controls. When all markets are moving as one, that risk control is rendered ineffective – and sure enough, losses were seen in 2009 when few if any markets acted on their own accord.

With the trend in stocks decidedly down right now, it is nice to see markets like Corn and Sugar acting not as proxies for the world economy – but trading on their own supply and demand characteristics.