Commodity index
A measure that collapses the prices of a basket of raw materials into a single value.
How to read the number
It lets commodities be discussed as an asset class; the weights, drawn from output or from contract liquidity, define the character of the whole index.
When the metric lies
It is built on futures and therefore carries the result of rolling. In prolonged contango the index lags the very spot prices it appears to be made of.
Also known as: commodity basket index