Sat, Nov 22, 2014
A A A
Welcome kbr175@gmail.com
RSS
Commodities Briefing 21.Nov 2014

Posted on 21 November 2014 by VRS |  Email |Print

Executives of three US banks are being grilled by senators over accusations the banks engaged in unfair trading practices relating to several commodities. A two-year report found that Goldman Sachs, Morgan Stanley and JP Morgan Chase bought up large stockpiles of commodities like aluminium and copper.
In doing so, they were able to influence prices and gain advantages. The banks deny they exploited any trading advantages from these holdings…………………………………Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

The “commodity super cycle” is dead. Now, it’s time to get used to the “commodity super down cycle, and China is the biggest reason why, warn strategists at Credit Suisse in a Thursday note.
Commodity demand tends to be very cyclical. Commodities, however, have been underperforming cyclical indicators of growth, including industrial production and new manufacturing orders (as measured by Institute for Supply Management survey data), they say. Much of the blame is on China, the strategists argue, noting that the country remains the “most significant source” of demand for most industrial commodities…………………………………Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

Goldman Sachs has been trying to distance itself from the “vampire squid” image it developed during the financial crisis. The findings of a Senate investigation into commodities market rigging probably won’t help.
According to the report, Wall Street banks may have manipulated commodity prices in recent years, raising costs on consumers. The investigation looked into the holdings and dealings of Goldman (GS), JPMorgan Chase (JPM) and Morgan Stanley (MS) in physical commodities………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

If OPEC fails to take a unified approach on stabilizing oil prices the global economy will be the biggest winner because oil prices will continue to fall, Fred Beach, of the University of Texas at Austin, said.
First of all, Saudi Arabia being an independent producer doesn’t always link its production to supply and demand that other OPEC countries want to do. That is why there is so much focus on the upcoming OPEC meeting to see if the organization as a whole comes to an agreement to either cut production to stabilize prices or if the independent countries want to go their own way………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

Venezuela, openly frustrated by Saudi Arabia’s refusal to support a cut in crude production, is reaching out beyond OPEC to discuss ways to stop the recent decline in oil prices.
OPEC will be meeting at its Vienna headquarters on Nov. 27 to decide on its production goals, but on Nov. 17, Venezuelan President Nicolas Maduro said he and Russia were working to set up a meeting “very soon” with oil countries outside OPEC as well as within the cartel to discuss ways to prop up the price of crude, which is now at a four-year low………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

Growing optimism that OPEC will constrain oil supply to prop up prices prompted the price of crude to nudge up higher. OPEC is the cartel of oil exporting nations and is meeting next Thursday (Nov 27).
Reportedly, the odds are growing the group will either cut production or more rigorously enforce their own production quotas as the price of oil has slumped over 25% since June. West Texas Intermediate futures - for January 2015 delivery - is up 0.56% to US$75.06………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

Oil prices gained Thursday, snapping a three-day losing streak, on expectations that the Organization of the Petroleum Exporting Countries would take action at its meeting next week to stop prices from falling.
Oil prices have plunged about 30% since mid-June on concerns about ample global supplies and tepid demand growth. OPEC, which controls about one third of global production, has acted in the past to cut output to keep prices high. However, traders have grown skeptical in recent months that the group, especially top exporter Saudi Arabia, will reduce production at its Nov. 27 meeting………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

Iran’s oil minister said he will talk with top oil exporter Saudi Arabia about market share when OPEC meets next week in Vienna, as Tehran plans for the possible end of sanctions and unfettered crude exports. Zanganeh said Iran’s oil exports would increase by two fold within two months of lifting the sanctions, although analysts say it may take longer. Iran exports around 1.3 barrels of oil per day.
“The countries in the south of the Persian Gulf are interested in keeping their market share and a decrease in market share will be difficult,” Iran Oil Minister Bijan Zanganeh was cited as saying by the official news agency IRNA on Thursday. “Under no circumstance, will we reduce our global market share, even by one barrel.”…………………………………Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

There is a high degree of uncertainty over how November’s OPEC meeting and Iranian nuclear negotiations will unfold. Either way, the end of November will have a huge impact on oil prices. As November draws to a close, there are two major events that could profoundly change the oil markets.
With the clock ticking, the 5 permanent members of the UN Security Council plus Germany (P5 plus 1) are negotiating down to the wire with Iran over its nuclear program. The two sides have made substantial progress, but some difficult issues remain unresolved ahead of the November 24 deadline………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

Comex gold futures were higher on Thursday but limited by dollar strength after Federal Reserve minutes suggested the United States is still likely to raise interest rates next year. Gold also fell sharply on Wednesday after a poll showed weaker support among Swiss voters for a referendum proposal that would force the central bank to boost its gold reserves. Selling by gold funds resumed after a brief pause this week.
Comex gold futures moved perfectly in line with expectations. As anticipated, favoured view initially expects a rebound to $1,185-90 an ounce levels. Prices have once again tested the psychological resistance at $1,200. However, if it fails to follow-through higher as cautioned earlier, could see another round of selling which could take prices lower to recent lows or even lower. Momentum in the short-term picture looks favourable for a push higher towards $1,235-40 levels………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

Gold rose on Thursday on data showing rising U.S. inflation, and after the previous day’s 1-percent drop triggered renewed physical interest by price-sensitive Asian buyers. Bullion investors focused on U.S. Labor Department data which showed underlying inflation pressures rose in October, even though that also bolstered expectations of a mid-2015 interest rate hike from the Federal Reserve.
The gold market also ignored other data that showed a strengthening U.S. economy, including rising existing home sales and lower weekly jobless claims………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

The gold price was stuck under $1,200 per ounce during Thursday morning sessions, as the FOMC minutes released yesterday failed to surprise or ignite the market. The spot gold price was last at $1,185.20/1,186 per ounce, up $3.40 on the previous day’s close.
“After gradually rising from rather depressed levels since the beginning of November, prices are finally approaching the psychologically important $1,200 level. The market tested this level several times on Wednesday but failed to break decisively higher,” said Credit Suisse………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

Gold prices extended losses for a second session Thursday, continuing to feel pressure from news that a proposal which could require the Swiss central bank to ramp up its holdings in bullion is losing support.
Gold for December delivery fell $3 to settle at $1,190.90 an ounce, reducing an earlier loss that saw it down as much as $16. December silver was off 16 cents to $16.14 an ounce. When interest rates rise, demand for gold weakens since it does not pay interest………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

The two-year US Senate investigation into banks’ commodities business has thrown a sharp light on the relationship between metals warehouses and their owners.
A 403 page document released on Wednesday alleges Goldman Sach’s 2010 purchase of Metro International Trade Services, a Detroit warehouse operator, led to rising aluminium prices as the company paid incentives to holders of the metal to shuffle it between warehouses, artificially increasing the length of queues and creating the impression of strong demand………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

With the iron ore price touching $US70 a tonne overnight, the price is closing in on the point where only Rio Tinto and BHP Billiton will have profitable iron ore businesses. Despite the continuing collapse in the price, however, both remain committed to driving increased production volumes.
Any of the smaller producers hoping for some relief from the apparently inexorable decline in the price to levels below $US70 a tonne — when the price usually firms in November and December as China’s steel mills build up their stocks — would have had them dashed by Andrew Mackenzie’s comments at BHP’s annual meeting in Adelaide today………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

Daily average aluminium production in the world outside China slid to 66,200 tonnes in October, according to the International Aluminium Institute (IAI). It was the lowest collective run-rate since January with continued strong growth in the Gulf region, up 23 percent so far this year, offset by curtailments and closures elsewhere.
Annualised non-Chinese production has fallen by 1.61 million tonnes since the start of 2012, which was when Western producers started wielding the collective axe in response to low prices………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

Goldman Sachs Group Inc. (GS) executives sparred with lawmakers over accusations that its aluminum business improperly influenced prices and that the firm’s traders had unfair access to market-moving data. Under fire at a hearing today on whether Wall Street’s ownership of commodities spurs conflicts, Goldman Sachs’s Jacques Gabillon disputed senators’ charges that long wait times for aluminum stockpiles had a direct effect on what companies and consumers pay for the metal.
Only a handful of Goldman Sachs employees get information on the aluminum unit and reports are limited to financial performance, he said. “When everything is said and done, you can say there is no correlation” between wait times and price, said Gabillon, head of the New York-based bank’s global commodities principal investments group………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

It’s good to be the king these days—King U.S. dollar, specifically. The dollar began a steep rise during the summer, and since then it has been gaining against several major currencies, especially the beleaguered euro.
As the dollar keeps rising, which analysts predict, there’s still more firepower to fuel even further gains. And one way to ride this surge is with currency ETFs that bet on a bullish dollar or even against a weakening euro………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

After performing remarkably well in the initial months of the year, the broad commodity market started to falter in the later part. This is primarily due to a slowdown in the world’s largest consumer of raw materials –China, soft economic data from key developing economies, stalling recovery in Europe despite the stimulus package, improving U.S. economy, robust grain harvest for most agricultural commodities and demand/supply imbalances for most industrial metals.
Additionally, strengthening dollar, continued bullishness in the stock market and increased appetite for riskier assets added to the woes. This is especially true as a rising U.S. currency makes dollar-denominated assets more expensive to foreign investors, thereby dulling the appeal for the commodities…………………………………Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

After a rough patch in the last six months thanks to a stronger dollar and accelerated crop plantation on a favorable weather outlook, corn ETFs seem to now heave a sigh of relief. This is important since corn is one of the most important U.S. crops, and is the most important agricultural product in many states. And overall, the nation enjoys the status of the world’s largest exporter of the staple. U.S. farmers are experiencing an unparalleled corn inventory this year thanks to ideal weather conditions for corn harvests.
On the other hand, anemic growth in the global economy and lingering concerns over macro uncertainty has dragged down overall agricultural consumption so far this year, hurting corn export sales. A cut in Chinese corn imports brought its share of troubles. And the most important deterrent – a stronger U.S. dollar – is making exports expensive, posing threats to this staple futures. …………………………………Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

The Japanese currency is sinking. On Thursday, the yen fell to a fresh seven-year low of 118.98 against the US dollar, two days after Prime Minister Shinzo Abe called a snap election and announced his decision to delay a sales-tax increase because Japan had fallen back into recession.
The yen has lost about 20 per cent of its value in the past two years - 8 per cent since the BOJ stunned markets on Oct. 31 by announcing it will expand its already massive asset-buying programme to try to stimulate the moribund economy. This had the effect of further weakening the yen and making Japanese exports less expensive to foreign buyers………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

Foreign-exchange volatility reached its highest in more than nine months as forecasts for economic growth and less-stimulative monetary policy in the U.S. diverge from overseas prospects.
The dollar slipped from a five-year high even as a report showed faster-than-forecast U.S. inflation. The yen reached a seven-year low versus the greenback as Japanese lawmakers prepare for early elections in which Prime Minister Shinzo Abe will seek a fresh mandate for economic stimulus. UBS AG said the Swiss National Bank “might have started” buying euros to defend its currency cap. South Africa’s rand and Russia’s ruble rallied………………………………….Full Article: Source

Posted on 21 November 2014 by VRS |  Email |Print

China is among a select group of nations on track to meet their emission-reduction goals by the end of the decade, according to new data from the United Nations Environment Programme (UNEP). Brazil, the European Union, India and Russia join China as the global players expected to meet projections ahead of 2020, while other leading countries need to implement added measures to curb their emissions projections, the report said.
“Linking development policies with climate mitigation will help countries build the energy-efficient, low-carbon infrastructures of the future and achieve transformational changes,” Achim Steiner, UNEP’s executive director, said in a statement Wednesday that accompanied the release of the report………………………………….Full Article: Source

See more articles in the archive

banner
November 2014
S M T W T F S
« Oct    
 1
2345678
9101112131415
16171819202122
23242526272829
30