What is driving broad commodities’ 33% rise in 2026?

KEY TAKEAWAYS

• Broad commodities have benefited from a combination of geopolitical conflict, inflation and tighter supply conditions in 2026.
• The Bloomberg Commodity Index (BCOM) recorded a 5% positive roll yield through the third quarter, its highest for the period since 2003.
• Energy continued to outperform in the third quarter, while grains and soft commodities also gained amid weather disruptions in key growing regions.

This article was written by Jim Wiederhold, Commodity Indices Product Manager at Bloomberg.

Commodities have been among the strongest-performing asset classes in 2026 amid inflation, supply disruptions, weather-related pressures and heightened geopolitical uncertainty. This has been reflected in the performance of the Bloomberg Commodity Index (BCOM), a broadly diversified benchmark of commodity futures, which rose 33% through the first three quarters of 2026. A very conducive macro environment led to the current commodity bull run. We discussed key themes this year which have played out so far such as an increase in geopolitical conflicts, inflation, industrial metals outperforming precious metals, and weather disruptions.

Through three quarters, 2026 has shown to have the highest positive roll yield for BCOM at 5% since 2003, a period that coincided with the previous commodity supercycle.

This article looks at the factors behind broad commodity performance in 2026, including the role of positive roll yield, futures curve dynamics and performance across commodity sectors.

How has positive roll yield contributed to commodity returns?

Broad commodities exposure tends to have a negative roll yield historically but during commodity supercycles like the one we are in now, we can have several years of positive roll yields. This adds further cushion for long-only investors looking to add commodities for diversification or inflation hedging purposes in their portfolios. Exhibit 1 shows how the total return of BCOM rose 9% more than spot prices with 5% contributed to the positive roll yield and the remaining 4% coming from the collateral yield (SOFR rate as of mid-June 2026).

As the underlying futures curves for most of the major commodities remain in a state of backwardation,or downward sloping, a positive roll yield can be achieved over time.

After the global supply of oil and byproducts was disrupted at the start of the US-Iran war in February, most of the energy commodity futures curves moved to steep backwardation and have stayed that way over the last seven months.

Exhibit 2 from the Curve Analysis tab of our Bloomberg Intelligence Commodity Dashboard shows the extreme level of backwardation this year for the energy sector in particular. There is usually only a single digit percentage curve shape either in backwardation or contango across all sectors over the last 10 years but 2026 really stands out.

The  contribution from positive roll yield in energy, as long only futures holders roll their higher priced expiring futures to lower priced futures contracts further out the curve, has been the biggest reason why BCOM has had such a strong overall positive roll yield  this year.

Which commodity sectors led in the third quarter of 2026?

With the positive roll yield environment, we experienced one of the best year to date performances for BCOM if this 33% total return holds through the rest of 2026. During the live history of the index since 1998, 2000 was the only year which came close to this level. Notably, BCOM averaged 11% over the last five full calendar years to the end of 2025 with the 2020s so far proving a strong macroeconomic environment for the asset class.

Drilling down into sector performance over the last quarter, energy continued to outperform.

The continued conflict in the Middle East was a major factor, while demand has also recovered as inventories of oil byproducts such as diesel have declined. Concerns from market participants have led to prices across the sector remaining bid.

Grains and soft commodities were also higher in the third quarter as weather issues played out in key crop growing regions around the world. Exhibit 3 shows 3Q 2026 performance  by sector alongside year-to-date performance.

The increase in geopolitical conflicts in 2026 has been a major factor in commodity performance. This is broadly consistent with historical patterns: significant supply disruptions have tended to push commodity prices higher as market participants adjust in order to determine what price will pully supply/demand imbalances back to equilibrium.

Not only the tactical case for a commodities portfolio allocation was demonstrated this year, but a strategic asset allocation has shown to contribute positively to portfolio performance over the last three years. This decade the world has become more fragmented, costs have increased, conflict has occurred on an increasingly regular basis leading to supply and transit disruptions, and the global economy is still humming along with increased demand for raw materials.  These conditions may remain relevant for commodity markets. BCOM has stood the test of time and the commodities asset class has demonstrated the potential diversification benefits in 2026 with one quarter to go.

Interested to learn more? Explore Bloomberg indices here.