Oil continues tumbling and that is weighing on other commodities, including agricultural commodities. For example, the PowerShares DB Agriculture Fund (NYSEArca: DBA) is off 1.1% over the past week and that is not even the worst performance among agriculture ETFs.
The PowerShares DB Agriculture Fund tries to reflect the performance of the Diversified Agriculture Index Excess Return, which is comprised of futures contracts on the most liquid and widely tracked agriculture commodities.
Some oil market observers see more declines coming for crude. Oil traders are concerned over how fast U.S. shale oil producers will increase production to capture the rising prices. Rig counts have recently ticked higher and with credit and earnings issues improving for some U.S. shale drillers, those companies may seize the opportunity to exploit higher pricing in the near-term.
The bad news for commodities is that many are usually not highly correlated to oil, but those correlations are rising as oil slides.