Commodities were lower in May, driven by supply fundamentals and macroeconomic factors, according to Credit Suisse Asset Management.  

The Bloomberg Commodity Index Total Return performance was negative for the month, with 15 out of 22 Index constituents trading lower.

Credit Suisse Asset Management observed the following: 

• Industrial Metals was the worst performing sector, down 7.70%, as a continued weak economic growth outlook for China weighed on demand expectations. 
• Agriculture declined 3.50%, led lower by softs, as a weaker Brazilian Real incentivized exports of sugar, coffee and soybeans. In addition, heavy rainfall improved the coffee harvest outlook in Brazil and Colombia, increasing supply expectations. 
• Energy finished the month 2.13% lower, led by Natural Gas.  Inventories rose more than expected towards the end of the month, and forecasts for moderate weather across the U.S. decreased cooling demand expectations. 
• Livestock gained the most, up 2.34%. In addition to Lean Hogs, Live Cattle also ended the month higher following increased wholesale beef demand. Furthermore, good pasture conditions incentivized producers to hold back cattle, shrinking near term supplies.   
• Precious Metals increased 1.29%, buoyed by heightened geopolitical risk and uncertainty over the Greek debt crisis, supporting demand for silver and gold.  

Nelson Louie, Global Head of Commodities for Credit Suisse Asset Management, said: "Mixed economic data continues to undermine the sustainability of a pronounced global economic recovery. However, recent market and economic indicators may hint that global industrial production momentum, especially in both the Eurozone and the U.S., has troughed and is set to accelerate. In the U.S., much of the economic data reported in May, for the first quarter as well as for April, was weaker than expected. First quarter GDP was revised lower and indicated contraction, though weakness may have been due to the extremely cold late winter weather, the West Coast port shutdown and the sharply stronger U.S. dollar. However, a number of key indicators remained healthy. Unemployment continued to decrease to near full employment, and new home sales bounced back in April to near the highest levels since 2008."

Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added, "The U.S. Federal Reserve appears to be growing closer to tightening interest rates, with U.S. core inflation running near its target, along with broad measures of unemployment. European and Japanese central banks continue to utilize policies designed to stimulate, while China's policy remains more ambiguous, but seems willing to ease as necessary. An increase in global inflation is increasingly likely amid such a backdrop. Volatility across multiple asset classes also seems set to continue. As such, we believe investors may derive long-term diversification benefits in conjunction with potential inflation protection through a strategic allocation to commodities."