Commodity prices are trading sharply lower as risk aversion grips financial markets. Sentiment-sensitive crude oil and copper prices are following stocks lower while gold and silver face de-facto selling pressure as haven flows boost the US Dollar.
The dour mood began to take shape in Asiaafter ratings agency Egan Jones downgraded Spain while state-run media outlet Xinhua reported that China was not planning an aggressive round of stimulus to combat this year’s growth slowdown………………………………………..Full Article: Source

This past week saw a plethora of information affecting the various markets we follow and report on — not the least of these was concern that China. The world’s largest consumer of raw materials and products was reportedly experiencing an economic slowdown.
Another factor was the ongoing Greek debt crisis which developed into the question of whether or not Greece would leave the euro currency. This would create serious problems for the Eurozone as billions were already pumped into Greece to forestall or, in our opinion, delay the inevitable default………………………………………..Full Article: Source

Play - Download this article

|

Play - Download Full Briefing

|

Subscribe to the Podcast Feed

Commodities have taken a miserable tumble as a combination of forces act in synchrony and weigh down on global prices. On the one hand you have an unresolved Greek debt crisis to which there seems no end.
President Karolos Papoulias has only today announced that Greece will yet again return to elections. It gives rise to the very serious possibility that Greece will indeed exit from the Euro-zone, a scenario few would have envisaged no less than a month ago………………………………………..Full Article: Source

Play - Download this article

|

Play - Download Full Briefing

|

Subscribe to the Podcast Feed

China’s economy may be on track to grow at its slowest pace in a decade, but there’s a silver lining to this: lower commodity prices may actually benefit the U.S. and Europe, just when they most need it.
“The U.S. might not be in too bad a shape because it would benefit form cheaper commodity and oil prices,” Frederic Neumann, HSBC’s Co-Head of Asian Economic Research said………………………………………..Full Article: Source

Asia-Pacific faces another year of slowing growth as demand for its exports falls in developed countries and capital cost rises, according to latest United Nations projections, which nonetheless show optimism as the region will remain the anchor of global economic stability.
Commodity price volatility with the long term outlook of an upward trend is another major concern for the region, says the Economic and Social Survey of Asia and the Pacific 2012: Pursing shared prosperity in an era of turbulence and high commodity prices, the flagship publication of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), which is based in Bangkok, Thailand………………………………………..Full Article: Source

Deryck Noble-Nesbitt, Citywire A-rated smaller companies manager at Close Brothers, says he is avoiding commodity stocks and looking to cash-rich AIM companies.
China’s economic growth is slowing and government plans to sustain development though consumer spending are underway. However, the revision of the country’s path to success, away from the infrastructure boom and export market, could come at the cost of global commodity stocks………………………………………..Full Article: Source

Play - Download this article

|

Play - Download Full Briefing

|

Subscribe to the Podcast Feed

The economy of Latin America and the Caribbean should grow 3.6 percent this year, down from recent rates above 5 percent as slower expansion in China, a soft recovery in the United States and debt woes in Europe weigh on the global economy.
The Inter-American Development Bank, in its latest annual outlook released on Sunday, said the region’s fortunes would depend in large part on prices for commodities and demand from its biggest buyer - China………………………………………..Full Article: Source

We have long warned that a consequence of a sovereign debt crisis in various countries and coming in the US , would be currency devaluations and an international monetary crisis. Slowly but surely various commentators are now coming to that conclusion.
According to a new book launched this month, ‘In Gold We Trust?’ a currency crisis is coming and people should buy gold to protect themselves. Michael Green, co-author with Matthew Bishop of ‘In Gold We Trust?’, explains to Gregg Greenberg of The Street in the video why a currency crisis is unavoidable and investors need to protect themselves with gold. ……………………………………….Full Article: Source

When it comes to the commodities market, if China says it even plans to sneeze, others get a cold. And commodity markets got a fever after Chinese Premier Wen Jiabao lowered the country’s growth target.
Although prices recovered slightly on Wednesday after a fall on Tuesday, investors remain cautious that a slowdown of the Chinese economy will cut demand for commodities………………………………………..Full Article: Source

Worries over Beijing’s intention to orchestrate an economic slowdown are dogging major construction-commodity sectors, with leaders of the steel sector expressing the deepest concerns over the policy’s impact.
Premier Wen Jiabao on Monday lowered China’s growth target this year to 7.5% from 8%, signaling Beijing’s determination to manage a soft landing to moderate runaway economic expansion………………………………………..Full Article: Source

The world’s leading economies said on Sunday they were “alert to the risks of higher oil prices” and discussed at length the impact that sanctions on Iran will have on crude supplies and global growth.
Finance ministers and central bankers from the Group of 20 said in a statement after two days of talks that they welcomed a commitment from producer countries to ensure oil supplies………………………………………..Full Article: Source

Hedge funds increased bets on rising commodity prices to the highest since September on mounting confidence that growth in the US will strengthen demand. Money managers boosted their combined net-long positions across 18 US futures and options by 13% to 929,199 contracts in the week ended February 7, Commodity Futures Trading Commission data show.
That’s the highest since September 20. Bullish wagers on copper rose to a six-month high, and soybean holdings jumped by the most this year………………………………………..Full Article: Source

The IMF has sharply marked down its forecast for world growth and it now expects a mild recession in the euro area. Naturally, weaker world growth will affect economic activity in Latin America and the Caribbean.
Concretely, the Fund expects the world economy to grow by just 3.25 percent in 2012, three-quarter percentage points lower than our September forecasts………………………………………..Full Article: Source

China is at risk of falling into a recession by about 2015 that would reduce commodity prices as much as 70 percent, according to the chief executive officer at Smead Capital Management Inc.
Commodities from copper to crude oil may drop 50 percent to 70 percent from current prices in three years to five years, Bill Smead, CEO of the Seattle-based mutual fund, said in an interview in Singapore………………………………………..Full Article: Source

Developing countries have been advised to prepare for further downside risks, as Euro Area debt problems and weakening growth in several big emerging economies are dimming global growth prospects, the World Bank said in its newly-released Global Economic Prospects report.
The World Bank has lowered its growth forecast for 2012 to 5.4 per cent for developing countries and 1.4 per cent for high-income countries, down from its June estimates of 6.2 and 2.7 per cent, respectively………………………………………..Full Article: Source

The World Bank has warned that the globe risks a deeper recession than the 2008-09 crisis, with any recovery likely to be longer as Europe’s debt problems and slowdowns in key countries such as India threaten growth.
As the Gillard government last night warned that Australia would be “hit by the huge challenges in the global economy” while expressing confidence that the nation would weather the storm, economists predicted further interest rate cuts as the Reserve Bank sought to insulate the local economy………………………………………..Full Article: Source

The boom in commodity prices over the last decade has been bad news for Britain’s infrastructure. As China builds up its cities, the rise in metals prices has tempted thieves in the West to start tearing down our own.
Everything from church roofs to copper railway cabling has been targeted. Theft from the railways in London rose 70% last year. Energy firms report 700 thefts a week from substations and pylons, reports the London Evening Standard. Six people died last year trying to steal live cables………………………………………..Full Article: Source

Weakness in global equity markets, uncertainty in the Euro zone, and a slowdown in China and other emerging markets has had a ruboff effect on commodities as well. The sentiment is likely to remain weak till some positive signal emerges. There was a sell-off in all major commodities like gold, silver, crude oil along with base metals and agri commodities.
Base metals and silver were among the biggest losers while agri commodities were the least impacted. Wheat and soybean also managed to post a marginal gain of a 1%………………………………………..Full Article: Source

Credit Agricole will stop trading commodities and will also slash its financing of the multi-billion-dollar market, the most sweeping commodity cuts yet among European banks strained by the euro zone crisis.
Credit Agricole, the formerly farm-focused bank that had boosted its energy trading in recent years, warned on Wednesday of losses and write-downs as it struggles to cope with the credit crunch. The cuts come just weeks after rival Societe Generale shut down its year-old U.S. gas and power trading desk, and leader BNP Paribas consolidated………………………………………..Full Article: Source

Over the last 24 hours, tensions between the Iranian republic and Israel have become more pronounced. As Iran fears a United States-backed attack by the Israelis, the nation has decided to start pursuing rampant military drills in order to prepare itself for the worst.
Its most recent drill took place in the Straits of Hormuz, a strategically significant waterway bordering southern Iran. It is also used to export crude oil and petroleum from the Persian Gulf. It is no surprise that once the Iranian government shut down the waterway that energy futures spiked………………………………………..Full Article: Source

Tougher international sanctions on Iran may lead to higher global crude prices and a decrease in output capacity for OPEC’s second-largest oil producer, the International Energy Agency said.
A proposed European Union ban on purchases of almost 600,000 barrels a day of Iranian crude would “likely” force refiners in the Mediterranean region to pay more for oil from other suppliers, the agency said……………………………………….Full Article: Source

Metals and most energy prices fell Thursday as concerns deepened about Europe’s efforts to deal with its crippling debt crisis. Gold, palladium and oil each fell about 2% while silver finished down 3.3%. Natural gas, corn and soybeans rose.
European Central Bank President Mario Draghi said there was no existing plan for large-scale government bond purchases, which was something many investors had expected. The central bank did cut its benchmark interest rate to 1% and took other steps to help Europe’s economy………………………………………..Full Article: Source

A sharp slowdown in commodities revenues generated by leading investment banks between July and September suggests the boom is beginning to subside after a promising first half of the year, according to figures from data provider Coalition.

In the first nine months of 2011, total commodities revenues for the top 10 investment banks, according to Coalition, rose 16% to $5.49bn compared with the same period a year earlier……………………………………….Full Article: Source

Frenetic speculation on ever more opaque and complex, intensely rigged energy and commodity markets has generated a contango-dominated context where only high prices now, and higher prices further out can save the day - for market operators and players.
This applies almost across the board and with few exceptions. The so-called market neutral change-on-a-dime flexibility does not apply for pure and basic financial reasons: equities have taken a solid beating and the loss has to be made up somewhere else in the “seamless asset space”………………………………………Full Article: Source

Want a clue as to how corn, sugar, wheat, oil or gold futures will perform? Take a look at what investors think of the chances of bank default.
A “bloodbath” in one segment of the commodities market in September, which in futures landed copper with its worst month in three years, and corn its worst since 1996, was down to fears for banks being unable to pay up more than concerns for the raw materials themselves………………………………………..Full Article: Source

Well, today — give or take — the world is 7 billion people big. That, at least, is what the UN has been saying. The fact that the world’s population hit 7 billion is almost less astounding than the fact that it was 6 billion only 12 years ago! That means, of course, that each milestone is coming exponentially faster.
Perhaps the more worrisome issue is how to stretch our finite commodities resources over the exploding population’s needs. The obvious commodities in this case – agricultural crops and water – will be the most immediately strained in the upcoming decades. But how will raw industrial materials – minerals, ores and oils – and the industrial metals that depend on them be affected?……………………………………….Full Article: Source

As U.S. stocks extended gains Thursday with the Dow Jones industrial average surging some 300 points, commodities rallied, too, with gold rising 1.5 percent.
“We’re seeing a disconnect from the old relationship of equities down, gold up,” said Rich Ilczyscyn, senior strategist at MF Global, adding funds are allocating money to the gold trade because the precious metal didn’t break the trendline of $1,600 an ounce. “If the $1600 level holds, its relatively low-risk on the big scheme of things to start getting long.”……………………………………….Full Article: Source

The empires and periodic invasions of yesteryear are long gone, but Europe still has a talent for fomenting global crises. That applies to commodities—though not necessarily because of the Old Continent’s absolute demand.

In 2005, the euro zone’s current members burned 11.5 million barrels of oil a day, or 13.6% of global demand, according to the U.S. Department of Energy. Come 2010, as the euro zone slipped into an existential funk, oil demand was down to 10.6 million barrels a day, or 12.1%………………………………………..Full Article: Source

The biggest rout in commodities since the global recession may be a sign that the fastest U.S. inflation in three years is peaking. The Standard & Poor’s GSCI Index of 24 commodities entered a bear market last month after sliding more than 20 percent from a two-year high in April, on concern that slower growth will cut demand.
A slump in the gauge from a 2008 record preceded a drop in inflation, while a 2009 rebound caused the consumer price index to climb. Raw materials fell 12 percent in September as the CPI rose 3.9 percent from the same month a year earlier, the most since 2008………………………………………Full Article: Source

The optimism that drove stocks and commodities higher last week has evaporated on increased concerns that European leaders at this weekend summit in Brussels will fail to deliver a workable solution to the Eurozone debt crisis. Several differences have emerged between Berlin and Paris and policymakers are working frantically to find common ground ahead of the weekend.
Failure to deliver workable solutions could reignite worries about an already fragile banking system and bring back talk of recession. Talking about the near-term direction of commodity markets is therefore very difficult at this stage and another commodity update will follow on Monday when we hopefully will be a bit wiser………………………………………Full Article: Source

As so often occurs during a crisis, a multitude of unforeseen forces are unleashed which end up making the situation much worse. Unfortunately, Europe’s sovereign debt and banking crisis is now resulting in numerous unintended consequences, especially in the commodities space.
In terms of obvious first-order effects, the marked tightening of financial conditions and the weakening growth picture in Europe is restraining demand for imports from the emerging world, especially Asia. Not surprisingly, commodities-demand has also been dragged down……………………………………….Full Article: Source

It’s been a bumpy, generally negative, ride for commodities in 2011. This has been particularly true for crude oil and gold, both getting whipsawed by investor sentiment and wild shifts in mood regarding the global economy. Black gold is traditionally a proxy for global growth whereas gold is a place investors turn in times of economic strife.
With both gold and crude well off their highs, the question facing investors is whether buyers are getting a value or catching a falling knife………………………………………..Full Article: Source

“Commodities are suffering as a function of faltering global growth demands” or “commodities are falling because the dollar has gotten stronger,” for instance. Neither of these answers are actually correct in any verifiable way but the process of analysis and the ensuing debates seem generally useful, at least to those inclined to fundamental analysis.
In contrast, technical strategists (read: chart guys) like Rich Ross of Auerbach Grayson, try to avoid this rhetoric and focus on patterns……………………………………….Full Article: Source

The International Monetary Fund (IMF) said Wednesday that the latest global economic and financial crisis presents a range of challenges to Latin America which generally has sound macroeconomic fundamentals.
“Downside risks are significant, with some countries more vulnerable than others,” the Washington based global lender said in its latest Regional Economic Outlook for the Western Hemisphere……………………………………….Full Article: Source

Hard times for manufacturing around the world suggest that recent falls in commodity prices have a sound fundamental basis and aren’t simply a function of risk aversion generated by financial crisis, according to one economic consultancy.
Capital Economics said the deterioration in global manufacturing confirmed in the September purchasing managers’ index data mean that underlying demand for commodities is weakening……………………………………….Full Article: Source

The sharp decline in metals and mining stocks reflects the weak appetite for risk among investors, but runs against strong Asian demand growth and structurally short supplies.
The commodity pullback has driven the S&P/TSX Mining Index down 33% in the past month alone, while mining currencies such as the Canadian dollar, Australian dollar and South African Rand have also weakened……………………………………….Full Article: Source

Commodity prices have taken it on the chin in recent weeks. With prices for everything from crude oil to corn and copper falling, the Dow Jones-UBS Commodity Index closed on Friday 14.7% below its end-of-August level.
That brought it to its lowest level since last October. Beyond fretting about the troubled U.S. and European economies, commodity investors worry that Asian demand is slowing……………………………………….Full Article: Source

First off, you say that there’s enough money, but I think that a lack of money is the primary concern. The European Financial Stability Fund has something like €440B in committed capital and the members haven’t agreed upon future funding requirements.
Also, the European Central Bank (ECB) itself only has €10B. If you compare that to the three largest banks in France, for example, they own roughly $600B in PIGS (Portugal, Ireland, Greece, and Spain)-related debt. You can see how imbalanced the system is and how undercapitalized some of these organizations are that are meant to be the solution……………………………………….Full Article: Source

Play - Download this article

|

Play - Download Full Briefing

|

Subscribe to the Podcast Feed

According to an analysis by market strategist Frank Veneroso, over the course of the 20th century, there were only 13 instances in which the price of a single commodity rose by 500 percent or more.
For example, the price of sugar rose 641 percent in 1920, and in the same year, the price of cotton rose 538 percent. In 1947, there was a commodities boom across three commodities: pork bellies (1,053 percent), soybean oil (797 percent), and soybeans (558 percent)……………………………………….Full Article: Source

One positive ramification of the Federal Reserve’s ‘significant downside risks to the economic outlook’ statement is the sharp fall in commodity prices.
Fearing demand contraction, commodity prices have corrected sharply in international markets. Brent crude fell below $110 a barrel to $107. Copper, purported to be the barometer of the ‘world industrial production cycle,’ has technically entered the bear phase……………………………………….Full Article: Source

A significant run-up in price over the past decade has caused investors to ask, “are commodities overvalued?” As iShares Chief Investment Strategist Russ Koesterich explains, there is a way to answer this question, but it’s not as simple as you might think.
Listen to the September Market Perspectives podcast for more on this topic……………………………………….Full Article: Source

Oil closed down 6 percent on Thursday, tumbling with other commodities that reflect investors’ risk appetite as renewed economic fears triggered the biggest losses since the Aug. 5 U.S. credit downgrade.

Snapping three days of relative calm, global stock markets tumbled as weak indicators for U.S. regional factory activity and business combined with fresh fears over the health of euro zone banks……………………………………….Full Article: Source

Play - Download this article

|

Play - Download Full Briefing

|

Subscribe to the Podcast Feed

Commodity markets are likely to be increasingly sensitive to future growth in China, especially as U.S. economic growth seems to be weaker than expected, says Barclays Capital in a research report.
Slow U.S. growth will put more weight on the Chinese economic growth pattern. “Our economists look for real GDP in China to slow to 9.3% y/y in 2011 and to 8.7% in 2012, following 10.3% in 2010, as the PBoC has tried to slow the economic recovery slightly to keep inflation under control,” Barclays says in “The Commodity Refiner” report……………………………………….Full Article: Source

Commodities plunged to their lowest level in eight months, extending two weeks of losses, on concern that the global share-market rout will slow the economy, eroding demand.
“The market is now worried about another global recession,” Natalie Robertson, commodity analyst at Australia & New Zealand Banking Group, said by phone from Melbourne. “The S&P downgrade of the credit rating has fuelled a lot of those concerns. The market is also focusing on the European situation.”………………………………………Full Article: Source

No sooner than global financial markets participants “catch their breath” from the ongoing turmoil in European and US markets, investors and speculators will soon turn to worrying about how the economic slowdown in Europe and the US will affect China’s economy.
The results of such musings are not likely to prove edifying for commodity markets……………………………………….Full Article: Source

The U.S. doesn’t deserve a AA-plus credit rating, much less triple-A, commodity bull and noted investor Jim Rogers said. He said the country was unlikely to be able to pay off its debt and Standard and Poor’s rating cut had come too late and should have happened long ago.
“It seems to me it’s physically, humanly impossible for the U.S. to ever pay off its debt,” Rogers said. “They can roll it over and continue to play the charade, but the U.S. is bankrupt.”………………………………………Full Article: Source

Commodities, except gold, will likely fall when markets open on Monday due to a US ratings downgrade and a worsening debt crisis in Europe but panic shall be avoided.
Bullion should benefit from renewed risk-aversion while outlook for demand for oil, base metals and grains deteriorates……………………………………….Full Article: Source

From sub-prime mortgages in 2007 to the newly downgraded US debt status, the latest crisis point is unlikely to be the last.
9 August 2007. 15 September 2008. 2 April 2009. 9 May 2010. 5 August 2011. From sub-prime to downgrade, the five stages of the most serious crisis to hit the global economy since the Great Depression can be found in those dates……………………………………….Full Article: Source

Frantic short covering on copper, or mounting worries over metal prices for 2012 - that is the quandary facing resource investors. The market has been sending conflicting messages; big sell-offs have been followed by super rallies. Meanwhile, there is a growing chorus of analysts warning of the wheels coming off the global financial system again.
First, the good news. Copper rose 2.3 per cent last night to $US9740 a tonne on the London Metal Exchange……………………………………….Full Article: Source

August Crude has advanced nearly $7/barrel in just over the last week but the next hurdle will be the 40 day MA at $98. On a settlement above $98 we see little in the way of resistance until $102. The resiliency in the distillates should keep Crude moving higher in the short run…in my opinion.
Natural gas closed lower by 3% today near its lowest level in one week. As long as $4.18 holds on a closing basis in August we still suggest bullish exposure. Our favored play with clients has been purchasing September call spreads anticipating a trade 6-8% higher than current levels……………………………………….Full Article: Source