The Attunga Agricultural Fund was up +3.73% in March, while the Enviro Opportunities Fund gained +4.51%. Attunga's offshore fund posted the strongest return, up +6.9% for the month.
Agricultural markets ended March higher, the Agricultural Fund benefiting from higher soy prices (due to tigher supply in the US as well as ongoing concerns over production in South America) in particular. Volatility spreads in corn, wheat, canola and soybean oil options also provided positive returns for the Fund.
March was characterised by significant falls in carbon affected electricity contract prices for the Enviro Opportunities Fund. With the Federal Government's Carbon Pollution Reduction Scheme (CPRS) due to be rolled out from July 2010, the electricity curve needed to factor in a carbon component however carbon prices fell dramatically during the month. Electricity contracts were slow to react to this, and this combined with the growing policital risks surrounding the CPRS and the impending start date conspired to reduce carbon-electricity spreads. The manager noted that the CPRS may cause an increase of approximately 85% of the cost of a tonne of carbon. They also noted that with plenty of debate ahead for the CPRS there will be many trading opportunities for the Fund.
