OptionMetrics flags hidden gems in commodities as wheat, soybeans outshine copper

Investing.com -- Wheat, soybeans and sugar have quietly posted sizeable gains this year with strong risk-adjusted returns, while copper has underwhelmed despite heavy media attention, according to a recent OptionMetrics post.

Writing for the options data platform, Brett Friedman noted that energy has understandably attracted the most attention in 2026.

However, the three agricultural commodities have delivered with much less fanfare. They also hold meaningful weights in the S&P GSCI and the Bloomberg Commodity Index.

For context, the SPDR S&P 500 ETF (SPY) and Invesco QQQ Trust (QQQ) had returned 11.7% and 15.8% year-to-date, respectively, as of Oct. 16.

Meanwhile, the 2026 year-to-date cumulative performance for sugar stands at +44.7%; for Chicago SRW wheat it is +32.3%, and for soybeans it is +22.1%

Friedman said the performance of the three crops is even more impressive on a Sharpe ratio basis (sugar +1.72%, soybeans +1.3% and Chicago SRW wheat +1.2%), which measures returns relative to volatility.

Wheat and soybeans have moved almost in lockstep this year. Their calendar-year price correlation stands at a record 0.919, meaning roughly 85% of the price movement in one crop can be explained by the other.

That leaves minimal diversification benefit between them. Both, however, continue to show their usual seasonal implied volatility pattern.

Copper, by contrast, has been caught up in the attention around AI given its role as a key input for electronics.

“Regardless, those trading it as an AI proxy have been disappointed so far this year,” Friedman wrote.

Copper has returned 15.5% year to date, but its Sharpe ratio is only 0.65, lower than sugar, soybeans and wheat. Its average implied volatility of 29.1% this year remains above its 21-year baseline of 26.9%.

“The financial press often confuses a compelling narrative with actual, risk-adjusted results,” Friedman said.

Original Article

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