Diapason Commodities Management, the $7 billion Lausanne, Switzerland-based commodity-focused alternatives shop is currently feeling the pinch of the downtrodden market.
 
The firm’s 10-month old Long/Short Agriculture Commodity Fund dropped another 7.42% last month, bringing its year-to-date losses to 3.48%. According to the firm’s investor letter, the agriculture sector was under assault in September by hordes of sellers forced to liquidate their positions on the back of the failures of well-known institutions, but also because of a more favorable outlook for the 2008 crops.

“Bigger than anticipated harvests in Europe and the Black Sea region boosted the amount of cheaper grains available for exports, creating demand destruction for the U.S. grains,” the firm said

“Corn took the brunt of negative news, falling by 17.3% despite lagging crop maturity in the United States…. The soybean complex was the weakest in the agriculture universe, with soybeans, soybean oil and soybean meal down by 20.5%, 17.9% and 20.4% respectively…. Finally, sugar prices were more resilient on the downside, losing ‘only’ 6.2% in September.”