3 Reasons to Love Commodities Now

Is it me or are summers going faster? It’s September already — and as the kids and grandkids head back to school, it can be a good time to consider your asset mix as the final third of the year begins.

Rodney Dangerfield and Will Ferrell both went back to school in the movies with hilarious results. But back to school on Wall Street can be serious business.

July and August are months when a lot of the big cats go on vacation, leaving the mice to have their way with stock and commodities prices.

But come September, big kitty is back and school is back in session. September is the month you find out which price moves were real and which ones were a mid-summer night’s dream. Markets that got a little out of whack often get whacked back into place. That’s true whether you trade Apple, Euros or contracts of cocoa.

This makes September a great month to take stock of your holdings and review investment basics. Knowing the investments you’re in — and why you’re in them — can give you the fortitude to hold through adverse moves, or be the catalyst to start fresh in a potentially more lucrative direction.

To that end, here are 3 reasons to love commodities now. And by “love,” I do not mean love them to necessarily move higher in price. This month, instead of focusing on options — which are simply the vehicle — you’ll see the potential monetary benefits of the commodities asset class itself.

Full-time commodities trader, or someone who has never traded a contract of corn in your life: these three reasons are a wake-up reminder of why diversifying matters, and why commodities should occupy a segment of any intelligent investor’s portfolio.

REASON 01

They’re Uncorrelated to Stocks

With the big traders back from August vacations, we’ll soon learn if the stock market’s lofty levels are the real deal or simply mad with summer wine.

But some ominous warning signs loom.

The S&P 500 is sitting in the mid-7,600s after another strong year. The VIX is trading in the mid-15s — still below its long-term average near 19, although certainly not as quiet as markets have been at other points in history.

But VIX aside, there are other reasons to be concerned about stocks. The Shiller CAPE is around 41 — a neighborhood last visited during the dot-com years. Leadership remains concentrated, margin debt has been elevated, and investors increasingly have to consider what happens if the enormous spending boom surrounding artificial intelligence fails to produce the earnings Wall Street currently expects.

In particular, September and October are historically bad months for stocks.

Last but certainly not least, the Federal Reserve’s rate-setting committee meets September 15-16 with the federal funds rate at 3.50-3.75 percent. Inflation remains above the Fed’s long-term target, and speculation continues over whether rates will need to remain higher — or potentially move higher still.

All of these are reminders that diversification from equities into separate non-correlated asset classes is a necessity — if not a responsibility — of high-net-worth investors.

While the leverage in commodities provides a unique set of risks, profiting in commodities can be just as achievable in bear or bull markets. The fact that commodities are an uncorrelated asset class is a good reason to love them now, regardless of whether you are bullish, bearish or neutral to prices.

REASON 02

September: The Month for Seasonals

In The Complete Guide to Option Selling, you discovered why seasonal tendencies are one of the biggest advantages enjoyed by commodities investors in the know.

September is an extremely active month for seasonal tendencies across the commodities spectrum. In grains, the new crop year begins September 1. Harvest gets underway in the US corn, soybean and wheat markets, often having an outsized influence on price.

Energy prices can also see a big impact from seasonal inventory accumulation at the end of summer. In softs markets such as coffee and sugar, end-of-harvest price pressure can come into play.

As one of the most active months on the calendar for seasonal opportunity, September is a great month to love commodities.

November Soybeans · 15-Year Seasonal Pattern

REASON 03

Fundamentals Remain King, Even in 2026

There is no shortage of potentially chilling headlines facing investors in 2026.

Artificial intelligence spending has reached levels few would have imagined a few years ago. Renewed conflict in the Middle East has already shoved crude oil prices around. Inflation remains stubborn. The Fed is debating whether 3.50-3.75 percent is restrictive enough. And equity valuations remain near the highest levels in modern market history.

Any or all of these could be bad news for stock investors. They may very well be.

But when the stock market crashed in 1929, people still woke up the next morning (well, most of them did) and drank coffee, ate cornflakes and — for the ones who had them — put gas in their cars. The same held true on December 7, 1941, September 11, 2001, and through the financial collapse of 2008.

Unlike stocks — truly one of the most emotional asset classes — commodities are more attuned to their core supply/demand fundamentals. If supply goes up and demand remains constant, prices should go down. And vice versa.

It’s Economics 101.

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Prices will always, ALWAYS, ultimately have to reflect their true fundamentals.

And while not always easy (commodities can trade emotionally, for a time, as well), the concept is quite simple. That gives the advantage to you as an investor who knows those fundamentals.

For example, look at this year’s grain markets. The USDA’s August numbers pointed to a second-largest US corn crop near 16.0 billion bushels, and a soybean crop near 4.52 billion bushels with a yield around 52.7 bushels per acre — again among the best on record. November soybeans are trading near $13 as the crop begins dropping leaves and crop ratings have slipped.

Weather concerns can still move prices sharply. A late-season problem can still change expectations. And as commodity traders know, a market can trade against its fundamentals for a time.

But the crop still has to come out of the field.

That’s what knowing fundamentals does for you in commodities. After AI. After the Fed. After inflation. After the Middle East. After all of the other summer “news,” soybeans still have to follow their fundamental master: supply and demand.

They don’t care about anything else. As a commodities investor, you don’t have to either. That’s a good reason to love commodities — especially now.

Conclusion

If you’re seeking an investment that will always hold a value regardless of news or geopolitical events, know you need to diversify, or you are worried about too much exposure to equities — commodities may be a unique asset class to add to your portfolio.

If you’ve been putting it off, September can be a great month to finally take the plunge. You’ve just read 3 reasons why.

Have a great month of option selling.