Agriculture commodities posted their worst monthly performance ever in October, and so did the Diapason Long Short Agriculture Commodity Fund. The 11-month old fund lost 17.58% last month, its worst drawdown since inception, bringing its year-to-date decline to 20.45%.

According to the firm, wheat prices lost 21.1% in October to reach their lowest level since mid 2007, contributing to a large extent to its losses. Corn also took a hit in October (down 17.6%) on the back of higher world production and reduced demand.

"As of Oct. 23, the U.S. export commitments were 40% below last year compared to the USDA forecast of 20% below," Diapson said. "With record foreign production of coarse grains and wheat, there is a high probability to see exports revised lower by the USDA."

"On the supply side, world output should reach 773 million tons, up by 2 million tons from the September forecast and only 14 million short of last year’s record level."

One of the worst performers in October was cotton, a soft commodity more correlated than the other ones to the economic cycles, according to the firm. "The credit crunch, hitting the retail sales and the textile industry around the world, caused U.S. export sales to plunge to extremely low levels. As a result, cotton prices slumped by 22.6% during the month, reaching their lowest since February 2005."

Overall, Diapason said October was a sad month as it took its lumps like many of its competitors. But it offered that "the tragedy is in no way looming over our shoulders" and it is making some changes in order to get back to a more respectable stance by the end of the year.