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VRS - who has written 48800 posts on Opalesque Commodities Briefing.


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The Year the World Felt the Might of China’s Commodity Traders

Posted on 30 November 2016

The Chinese speculators shaking up global commodity markets are switched-on, flush with cash and probably not getting enough sleep. For the second time this year, trading has exploded on the nation’s exchanges, pushing prices of everything from zinc to coal to multi-year highs and sending authorities scrambling to deflate the bubble before it bursts.

Rabobank Report Projects Better Commodity Prices Ahead?

Posted on 30 November 2016

A recent Rabobank report projects a rise in global demand should bring a three-year decline in commodity prices to an end. Nebraska Farm Bureau Senior Economist Jay Rempe says that outlook should give hope to farmers and ranchers who have been struggling through the downturn in the farm economy.

Hedge funds favour grains to soft commodities - but will it last?

Posted on 30 November 2016

Hedge funds, despite lifting bullish bets on cotton to a three-year, favoured grains to soft commodities – so much so that many investors saw scope for fresh selling in the likes of corn.

Can OPEC still swing global oil prices? We’re about to find out

Posted on 30 November 2016

Two years ago, global oil prices crashed after the world started pumping out far more crude than anyone needed. That plunge, from $100 per barrel down to $45 per barrel, completely upended the global economy — and cost oil producers like Saudi Arabia billions of dollars in lost revenue.

Here’s Why the Drop in Oil Prices Isn’t Over

Posted on 30 November 2016

Saudi Arabia, Iran, and Iraq can’t agree how to end a fight for market share. Here we go again. Like a year ago, crude oil futures are tumbling again Tuesday as hopes for a cut in output from the Organization of Petroleum Exporting Countries (OPEC) fade due to entrenched differences between its most important members.

Saudi Arabia’s oil problems run far deeper than OPEC

Posted on 30 November 2016

Saudi Arabia’s problems run far deeper than trying to cobble together a deal with fellow OPEC members to curb crude oil output in order to bolster prices. About two-thirds of Saudi Arabia’s oil exports head to Asia, and the kingdom’s struggles in the region’s two biggest importers, China and India, are symptoms of its wider issues in crude markets.

Goldman Sees OPEC Meeting Down to the Wire With 30% Odds of Deal

Posted on 30 November 2016

The oil market is pricing in a 30 percent chance of producers reaching a deal to cut output at OPEC’s meeting in Vienna, according to Goldman Sachs Group Inc. Global benchmark Brent crude may swing $6 a barrel on Wednesday, based on implied volatility for options contracts, analysts including Damien Courvalin and Jeff Currie said in a report Monday.

Deal Or No Deal, OPEC Can’t Win In Fight Against American Frackers

Posted on 30 November 2016

Like celebrating Thanksgiving with a houseful of in-laws, OPEC’s autumn meeting in Vienna brings a combination of joy and dread. Something unexpected usually crops up, but the headlines out of both meetings are about the same year after year:

Why Gold’s Lost Sheen Should Be Temporary

Posted on 30 November 2016

Conventional wisdom suggests that a Federal Reserve rate hike next month is bearish for precious metals, particularly gold. This is because gold investors aren’t rewarded with the interest coupon payments as Treasury holders are. Thus, the opportunity cost of owning gold is the potential cash flow of interest payments, or dividends if comparing it to equities.

Here’s Why Gold Could Fall All The Way To $700

Posted on 30 November 2016

Even though the markets haven’t behaved logically of late, it would have seemed a slam dunk for gold to rise if Donald Trump won. After all, we faced uncertainty around his policies, rising inflation from infrastructure spending, and higher expected growth rates.

Gold’s Recovery Falters as Fund Investors Keep Selling Assets

Posted on 30 November 2016

Gold halted its biggest gain in almost a month as investors extended the longest run of sales from bullion-backed funds in a year. Palladium climbed to the highest in almost 18 months.

Zinc rises to highest since 2007

Posted on 30 November 2016

The rally in metals is showing no signs of slowing down. The Bloomberg Industrial Metals sub-index posted the biggest five-day gain since 2011, as zinc touched a nine-year high. Prices rallied after China’s top economic commission approved a $36 billion plan on new rail links around Beijing, boosting demand for industrial raw materials.

Japan’s need for aluminum premium futures is limited, says LME chief

Posted on 30 November 2016

Japan’s need for aluminum premium futures is limited, London Metal Exchange CEO Garry Jones told the LME Tokyo Gala event Tuesday. LME launched four physically settled regional aluminum premium contracts, including Northeast Asia premium contracts for delivery to Japan and South Korea, in November 2015.

Metals Pare Best Rally Since 2012 as China Curbs Speculation

Posted on 30 November 2016

Industrial metals slumped, paring the biggest monthly rally in four years, on signs that China is taking steps to cool a trading frenzy in commodities. The Shanghai Futures Exchange and Dalian Commodity Exchange have raised margins and fees to ease a trading frenzy that’s fueled aggressive price gains this month, and further measures are expected, according to Citigroup Inc. analysts.

China, More Than Trump, Fuels Commodity ETF Surge

Posted on 30 November 2016

It’s no secret that base metals have done well in the month of November. Copper is up 20% month-to-date, its best monthly showing in a decade, according to Bloomberg. Everything from lead to zinc to nickel is up double-digit percentages also.

5 Agricultural ETFs Upgraded to Buys

Posted on 30 November 2016

So far, the year 2016 has been moderate for agricultural commodities with some specific grains like sugar, soybean and coffee seeing a spike in prices while most other still reeling under pressure as evident by the 1.5% year-to-date decline (as of November 25, 2016) in the broader soft commodity ETF PowerShares DB Agriculture ETF DBA.

China Tightens Controls on Overseas Use of Its Currency

Posted on 30 November 2016

As an exodus of money adds to the pressure on a slowing economy, regulators are trying to put the brakes on overseas use of China’s currency by increasing the scrutiny of certain overseas deals. The decision to restrict overseas use of the renminbi represents a setback in China’s long-term drive to turn the currency into a rival to the dollar and euro in the global marketplace.

Top Economists Around the World Assess India’s Currency Curbs

Posted on 30 November 2016

It has been more than three weeks since the government announced its decision to demonetise old Rs 500 and Rs 1,000 currency notes. There has been a wide-ranging debate on whether the government’s move will indeed succeed in curbing black money hoarding and tax evasion.

New platform cuts electricity bills for reduced carbon emission

Posted on 30 November 2016

Polluters who have reduced their carbon emissions can now apply for a reduction to their electricity bill, thanks to a new system rolled out by the carbon trade center in Beijing. Electric Carbon Contract, a cooperation project between Beijing Environment Exchange and GP Power Electricity Group, was launched on Tuesday in Beijing.

EU cement giants get €5bn carbon market windfall

Posted on 30 November 2016

The EU carbon market is supposed to make polluters pay. But generous handouts to industries deemed at risk of losing business abroad are undermining the system, a watchdog has warned. Cement producers reaped a €5 billion windfall from the emissions trading system (ETS) between 2008 and 2015, their annual reports reveal.

Global food prices to stay low in 2017: Rabobank report

Posted on 29 November 2016

High global stock levels expected to keep food prices low during 2017, however, Donald Trump presidency may bring currency uncertainty that will translate into volatile food prices, Rabobank said in its Agri Commodity Market Outlook for 2017 here.

China money back into commodities

Posted on 29 November 2016

In China, money flow is tightly controlled and capital markets are relatively underdeveloped, meaning the economy works like squeezing a balloon. You press it in one place, and it bulges in another. Policy-maker moves to cool one expansion only serve to inflate another.

Goldman Commodities Outlook: Metals & Oil Strength, Gold Suffers

Posted on 29 November 2016

Commodities analysts at Goldman Sachs raised their outlook for base metals prices on Monday with currencies as a tailwind, but lowered their gold projection and offered a mixed outlook for Australia-based metals producers as the commodities cycle peaks.

Oil and gas mergers and acquisitions are finally making a comeback

Posted on 29 November 2016

Oil and gas players are finally inking new mergers and acquisitions, after nearly two years of moribund deal activity. Deal-making hit a soft spot following the 2014 oil bust as banks tightened lending to distressed drillers and buyers and sellers remained at odds over the value of energy assets.

Get ready for $40 oil if OPEC deal collapses

Posted on 29 November 2016

It’s time for the oil industry’s favorite guessing game: Will OPEC continue to flood the world with more oil, or will it finally blink and cut production? OPEC reached a preliminary deal to much fanfare in September to cut output for the first time since 2008. That tentative agreement sent crude soaring above $50 a barrel.

Hey Oil Market: Forget About OPEC for a Second

Posted on 29 November 2016

The oil market’s attention is focused overwhelmingly on figuring out which OPEC member is going to cut what. The bigger question it shouldn’t lose sight of is this: Who will replace China?

The Oil War Is Over And America Has Won

Posted on 29 November 2016

Two years ago, Saudi Arabia and the other OPEC nations declared an oil war with America. On November 30h OPEC will meet to admit they have lost that conflict.

Russia, Iran agree to coordinate on oil and gas markets -Kremlin

Posted on 29 November 2016

Russian President Vladimir Putin and his Iranian counterpart Hassan Rouhani agreed in a telephone call on Monday to coordinate steps on global oil and gas markets, the Kremlin said.

Gold price fights back – touches $1,200

Posted on 29 November 2016

Gold was attempting a comeback of sorts in Asian trading on Monday despite relentless selling by physically-backed gold ETF investors since Donald Trump’s victory in US presidential elections.

A Note On Gold And India – What Is Driving The Gold Price?

Posted on 29 November 2016

It is well-known that India’s government wants to coerce its population into “modernizing” its financial behavior and abandoning its traditions. The recent ban on large-denomination banknotes was not only meant to fight corruption.

MKS, Commerzbank: Shanghai Gold Premium Hits Multi-Year High

Posted on 29 November 2016

The Shanghai Gold Exchange premium soared to multi-year highs overnight, with Commerzbank citing recent news reports that China’s government may restrict the number of import licenses and MKS (Switzerland) S.A. reporting that dollar weakness also boosted the appeal of gold.

What Is Gold Saying About Trump?

Posted on 29 November 2016

Amidst the larger drama of the election, the financial markets staged their own little drama. When the Dow futures plummeted by hundreds of points as it began to look as though Donald Trump would achieve a surprise victory, some people hastily jumped to the conclusion that financial markets feared a Trump presidency. Not so.

Is Palladium Going to Be the Precious Metal Winner for 2017?

Posted on 29 November 2016

Palladium seems to be the winner among precious metals for 2017 so far. As of November 21, 2017, palladium had a whopping rise of 32.5% year-to-date. That figure is far higher than the rises in gold, silver, and platinum. Platinum has the least year-to-date rise so far among the four precious metals.

Iron ore price means short-term budget relief, not repair

Posted on 29 November 2016

A bounce in the iron ore price to near two-year highs may deliver a short-term boost to the federal budget, but economists warn the benefit could be short-lived and only offset slower-than-expected wages and employment growth.

Zinc Prices Hit An 8-Year High: Did You Miss The Rally?

Posted on 29 November 2016

Remember when Barack Obama defeated republican presidential nominee Senator John McCain? Or Usain Bolt’s first appearance in the Olympic games? Well… that’s how far back you need to go if you want to see zinc prices as high as they are now.

Investors Don’t Take A Holiday When It Comes To ETFs

Posted on 29 November 2016

The steady stream of new assets to ETFs continued unabated during the holiday-shortened week, with a net of $8.1 billion of inflows after two-consecutive weeks that saw more $20 billion each.

Commodity ETF Inflows Near 2009 Record (Video)

Posted on 29 November 2016

Bloomberg Intelligence’s Mike McGlone and Bloomberg’s Abigail Doolittle examine the near-record inflows of commodity ETFs and expectations for the market in 2017. They speak on “Bloomberg Markets.”.

Should You Buy or Sell Oil ETFs Ahead of the OPEC Meet?

Posted on 29 November 2016

Oil prices have been volatile lately flipping between hope and despair regarding a likely output curb/freeze deal at the formal OPEC meeting in Vienna on November 30. Though Iraq and Iran were reluctant to cut oil output initially, Iraq finally gave its approval.

Index Funds, Quants and Hedging

Posted on 29 November 2016

The consensus that Index Funds Are Good is pretty universal, but also kind of boring. It turns out that the right way to invest is to … do nothing? To do exactly what everyone else does? To just stop paying attention? Indexing is low on action, low on personality, low on fees, low on excitement. It is good for you, but a bit bland.

Zimbabwe Begins Issuing New Currency

Posted on 29 November 2016

Zimbabwe is issuing a new currency, known as bond notes, that officially are equal to the U.S. dollar. The government has gone ahead with the plan despite warnings the new currency will fuel hyperinflation and worsen the already ailing economy.

PM Narendra Modi’s Currency Ban Move ‘Gamble’, Will Set Precedent

Posted on 29 November 2016

Terming Prime Minister Narendra Modi’s demonetisation move as “very bold”, China’s official media today said it was a “gamble” that would create a precedent irrespective of whether it succeeds or fails and China will draw lessons from its impact on corruption.

New Zealand to Save $31 Billion by Tapping Paris Carbon Markets

Posted on 29 November 2016

New Zealand is seeking to offset its global warming emissions by investing almost $5 billion in green projects overseas, saving six times that figure to meet its Paris climate commitments.

California Carbon Emissions story

Posted on 29 November 2016

Demand for California pollution permits rebounded in the latest carbon auction after plummeting earlier this year, state officials said Tuesday. Still, the permits did not sell out, heightening uncertainty about the program’s future.

Trump Administration to Rev Up Global Growth, Says OECD

Posted on 29 November 2016

If all goes according to plan, a group of international economic experts believe President-elect Donald Trump’s incoming administration will help the world economy grow faster than anticipated over the next few years.

Doubts shadow the recent commodities rally

Posted on 25 November 2016

Commodities prices have begun rising from their long slump, providing good news for the embattled shipping trade. But uncertainty and ambiguity in China, whose demand dictates the prices of many resources, are casting doubts over how long the rebound can last.

Speculation and fundamentals drive resources rally

Posted on 25 November 2016

The extraordinary rally in commodities is being driven both by fundamentals and speculation, but experts are divided as to its sustainability. The last time Fortescue Metals Group shares traded above $6 a share five years ago, iron ore was selling at close to $US120 a tonne, well above the current price of $US75 a tonne. The roaring return for Australian mining stocks has outpaced the recovery of their respective commodities.

As the commodity mega-boom winds down, the mini-boom gathers steam: Russell

Posted on 25 November 2016

As the once-in-a-lifetime commodity boom winds down, a key concern has been what is going to replace the mega-projects built to feed China’s appetite for natural resources. The huge minerals and energy projects that were both the solution and the demise of the China-inspired commodity super-cycle are unlikely to be repeated any time soon, but developments in Australia show it’s not all doom and gloom.

Could commodities suffer from the Trump effect?

Posted on 25 November 2016

Trump heading closer to presidency has seen a rally in metal and oil prices, further strengthened by the strong US dollar. However, this has generated scepticism about the markets and whether China’s rally will begin to fade out.

Commodities set for an ‘extraordinary bull run’, argue Schroders managers

Posted on 25 November 2016

Managers at Schroders explain why commodities should outperform in 2017 and give their three resources investors should look at to capitalise on this. Commodities have been a very disappointing area to be invested over the past few years but they could be at the start of another “extraordinary” bull run, according to the team at Schroders.

Natural Gas as a Global Commodity

Posted on 25 November 2016

The U.S. became a net gas exporter just a few weeks ago, but exports to Canada have actually been falling. Unlike still developing Mexico, Canada doesn’t have huge incremental gas needs, explaining why it’s so critical for Canada’s gas industry to have access to global markets via LNG. Interestingly, while Mexico is overdependent at 60%, natural gas accounts for just 10% of Canada’s power generation.

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