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Commodities Briefing - Category | Commodity Crisis more

Despite the commodity boom, Brazil is close to boiling point

Posted on 20 June 2013 by VRS  |  Email |Print

People have lost faith in the political process - protests over bus fares and the cost of hosting the Fifa World Cup have become a vehicle for anyone unhappy about anything.
How should a government respond when it is the target of nationwide protests? Swedish leaders reacted by wringing their hands and empathising, Turks by calling counter-demonstrations, Syrians by shooting the demonstrators………………………………………..Full Article: Source

Industrial commodities to stay subdued till Sept-Oct

Posted on 07 June 2013 by VRS  |  Email |Print

A subdued trend is likely to continue in industrial commodities until the third quarter of the current calendar year, due to weak global economic sentiment which has reduced their demand from consumer industries.
After a robust start at the beginning of this year, industrial commodities fell substantially due to lack of a clear direction from the US, the world’s largest economy. The average price of Brent crude oil, for example, is expected to fall from $113.19 a bbl in the first quarter of 2013 to $110 in the second and third quarters. Similarly, the average iron ore price is set to decline from $148 a tonne in Q1 to $125 a tonne in Q2 and further to $115 and $110 a tonne in Q3 and Q4, respectively……………………………………Full Article: Source

Industrial commodities to remain under pressure on cost pressure

Posted on 06 June 2013 by VRS  |  Email |Print

With many commodity prices in retreat over the past six months, the newly elevated production cost base will prevent further substantial falls in prices for most industrial commodities, Credit Suisse said in a report.
But, in near term, however, the price fall would continue due to falling demand from consumer industries. Over the past couple of weeks financial markets have become increasingly nervous about the possibility that the Fed would begin to taper its program of asset purchases in coming months………………………………………..Full Article: Source

Bad news for commodities as China likely to slow further

Posted on 30 May 2013 by VRS  |  Email |Print

For commodity traders, there is more bad news in store. The International Monetary Fund (IMF) has cut its forecast for China’s growth from earlier estimates of 8 per cent to 7.75 per cent for 2013. This follows weak data coming from the country. The biggest impact of a slowing China will be felt in the ‘hard commodities’ (mainly metals) markets. 
China was the reason for a major bull run in these commodities till 2007 on account of its huge requirement and spending in the run-up to the Beijing Olympics. However, a lull in spending by the country resulted in a downward slide in international prices of these hard commodities………………………………………..Full Article: Source

Latin America disappoints after squandering commodity boom

Posted on 30 May 2013 by VRS  |  Email |Print

Latin America is disappointing investors, economists and businesses with slower-than-forecast growth as waning commodity prices and strong currencies hit nations that failed to diversify and become more competitive.
The five biggest investment-grade markets in the region — magnets for foreign capital as rich countries stalled –expanded below projections or show signs of weakness. Mexico’s and Brazil’s gross domestic product missed estimates in a Bloomberg survey. Economists polled by Brazil’s central bank cut the country’s 2013 outlook this week for the second time in seven days, anticipating the worst three-year period in a decade………………………………………..Full Article: Source

Australia: Treasury ’surprised’ by commodities slump

Posted on 22 May 2013 by VRS  |  Email |Print

Treasury secretary Martin Parkinson concedes his department has struggled to keep pace with a ‘‘tumultuous’’ decade for the Australian economy. Addressing an economists’ lunch in Sydney, Dr Parkinson said the difficulty Treasury and other economic forecasters had had was predicting the path of global commodity prices, the exchange rate and capital gains.
‘‘While our forecasts for the real economy have held up reasonably well, the same can’t be said of our price forecasts,’’ he told Australian Business Economists. Dr Parkinson said Treasury’s forecasts for employment and wages had been relatively accurate, which meant that for income tax, the largest source of government revenue, they had changed little since last year’s budget……………………………..Full Article: Source

Commodity fears and China trouble fund managers

Posted on 16 May 2013 by VRS  |  Email |Print

Even as stocks continue their mostly uninterrupted path to higher ground, fund managers are holding relatively big amounts of cash while worrying about China and a commodities crash.
The latest survey from Bank of America Merrill Lynch shows that the biggest fear is a hard landing for China’s slowing economy, and the effect it would have on the global commodity trade. Commodity allocations have fallen to a four-year low while cash allocations held steady at 4.3 percent, a surprise considering how much equities have rallied…………………………………….Full Article: Source

Commodities and gold flash warnings for world economy

Posted on 18 April 2013 by VRS  |  Email |Print

Commodity prices have been falling since September, culminating in a rout over the past two weeks. That is a classic warning for the global economy. It is becoming ever clearer that the roaring boom in global equities since last summer has priced in an economic recovery that does not in fact exist.
The International Monetary Fund has had to nurse down its global growth forecasts yet again. We are still stuck in an old-fashioned trade depression, with pervasive over-capacity in manufacturing plant and a record global savings rate of 25pc of GDP…………………………………Full Article: Source

Falling commodity prices, slowing global growth stir deflation thoughts

Posted on 18 April 2013 by VRS  |  Email |Print

The sharp drop in gold prices in the past few trading days has overshadowed some general weakness in the commodity sector and coupled with lower-than-expected U.S. inflation data, some market watchers are beginning to talk about the possibility of deflation.
Gold rebounded slightly on Tuesday and Wednesday from the sharp drop in prices on Friday and Monday, but still remains 17% off the high for the year and 28% from the all-time high, based on the June Comex contract’s settlement Tuesday of $1,387.40 an ounce. But other commodity markets are also weaker for the year, including crude oil, down 5%; copper, down 10%; and corn, down 8%, all based on Tuesday’s settlements for the most-active futures contracts…………………………………Full Article: Source

As gold plunges, which commodities are joining it?

Posted on 17 April 2013 by VRS  |  Email |Print

Although the U.S. stock market has generated a healthy glow this year, the commodity complex appears to be entering into a growling bear market. Just consider these stats: After a sharp drop on April 15, gold has plunged nearly 20% since the year began and nearly 30% since hitting an all-time high of around $1,900 per ounce in the autumn of 2011.
West Texas crude oil has slipped from $97 per barrel to $87 in just the past two weeks. Copper has slid roughly 12% this year and is off roughly 27% since the summer of 2011 peak. If aluminum breaches the 80 cents per pound mark (it’s currently at 82 cents), it will see its lowest levels since the summer of 2009…………………………………….Full Article: Source

Commodity supercycle is basically over, says Citi

Posted on 16 April 2013 by VRS  |  Email |Print

Citi Research has called an end to the supercycle for commodities but that shouldn’t come as a surprise given that it warned of a supercycle “sunset” back in March of last year. In a report dated Friday, Citi said it expects 2013 to be year in which “the death bells ring for the commodity supercycle after its duly noted sunset.” A supercycle refers to decades-long price movements.
The commodities sector saw broad losses on Monday, with gold futures logging their biggest one-day drop since the 1980s on Monday, and oil futures finishing at their lowest settlement level of the year………………………………………..Full Article: Source

‘Commodities meltdown to continue’: Pro

Posted on 16 April 2013 by VRS  |  Email |Print

The price of gold, as well as other commodities, could have farther to fall, Joe Terranova of Virtus Investment Partners said. “The commodities meltdown, I think, is going to continue,” he said. “And I think to figure out exactly if this is a moment where you step in and in essence buy a falling knife, you have to look back toward the past.”
On CNBC’s “Fast Money,” Terranova pointed to a high in gold back in September 2011. “That’s exactly when we had that deficit debacle in Washington, D.C.,” he said. “Gold should’ve gone higher at that point. It did not.”……………………………………….Full Article: Source

Only a fool would invest in commodities now

Posted on 16 April 2013 by VRS  |  Email |Print

We just saw a rather ugly spate of data from China, and the result has been a bit of a selloff in markets, from Asia to the U.S. Not all stocks have been held back. Netflix, for instance, just had its price target raised at Goldman Sachs and rallied 5% to start the week. But commodity stocks as a whole are taking a beating. And don’t expect the pain to end anytime soon.
You see, industrial demand from China remains the single-biggest driver of pricing for a host of materials and commodities. Base metals, from steel to copper to aluminum, and energy commodities like oil and coal and natural gas are all getting brutalized by the China slowdown………………………………………..Full Article: Source

Commodities crushed! Don’t blame China

Posted on 16 April 2013 by VRS  |  Email |Print

The sell-off in commodities is getting serious in early trading on Monday. Word of Chinese GDP coming in at 7.7% against 8% expectations last night is being blamed, but today isn’t the start of the selling.
Brent crude is down 3%, but was already 15% lower that where it traded in February. Copper is near 18-month lows, aluminum is near 3-year lows and silver is down double-digits today alone………………………………………..Full Article: Source

Commodity crash 2013: Insights on commodities from hell

Posted on 16 April 2013 by VRS  |  Email |Print

That’s a headline that should get your attention if you invest in commodities (or if you work at a publicly traded company that has any exposure to the commodity markets). With increasing evidence of a slowing global economy and increased selling of gold by central banks, commodities are vulnerable. While evidence suggests that the ENTIRE commodity market is experiencing unusual price deterioration right now, I want to focus on a distinct commodity segment: Commodities from Hell.
Get it? Commodities from Hell, ones that can generally be found underground such as gold (GLD), silver (SLV), coal (KOL), copper (JJC), steel (SLX), oil (OIL) and natural gas (UNG)………………………………………..Full Article: Source

Even another Cyprus-style crisis can’t save gold

Posted on 28 March 2013 by VRS  |  Email |Print

Since the bailout deal was reached on Cyprus, the gold price has fallen. The decline suggests that gold is really in a weak position right now. I think the price is likely to fall further. Here’s why.
The major global stock markets are doing really well this year: the S&P 500 is up about 10 percent, U.K. stocks are up about 1 percent in dollar terms and Japanese stocks up about 10 percent. Even with all the problems in Europe, the Euro Stoxx index is down only about 2 percent in dollar terms. By contrast, gold and silver are down about 5 percent. Platinum and palladium have also outperformed gold and silver. In fact it’s hard to find any commonly held assets that have fallen as much as gold and silver………………………………………..Full Article: Source

Commodity booms, busts and bubbles

Posted on 26 March 2013 by VRS  |  Email |Print

Commodity markets are prone to bubbles, but like the ones in bathtubs, they don’t last. So concluded one of several interesting papers on commodity price fluctuations discussed at an International Monetary Fund seminar last week.
Researchers at the University of Illinois examined agricultural futures price data from 1970-2011 and found a spate of bubbles running through multiple markets. Sugar, soyabean and cotton markets underwent them with regularity………………………………………..Full Article: Source

China commodities ripple starts slowly

Posted on 14 March 2013 by VRS  |  Email |Print

As China’s economic growth fell to 7.8 per cent last year, its slowest pace in more than a decade, commensurate demand for commodities such as iron ore, copper and coal also slowed to single-digits, sending traders scrambling amid fears of a “hard landing” for the Chinese economy.
This year, though the “hard landing” has been averted, China’s anaemic demand growth for commodities is still sending ripples through the Chinese raw materials market, which had become accustomed to double-digit annual growth…………………………………….Full Article: Source

Prices tumble after talk of hedge fund in trouble

Posted on 21 February 2013 by VRS  |  Email |Print

Commodities tumbled on Wednesday amid speculation a hedge fund had been forced to liquidate positions across metals and oil markets, and gold fell to more than a seven-month low on worries that the U.S. economic stimulus may soon dry up.
Already under pressure from ongoing concerns about global supply and demand, commodity markets tumbled in high volume trade just before 11 a.m. EST (1600 GMT), with oil and gasoline prices dropping about 2 percent each……………………………………Full Article: Source

Choppy ride for commodity, energy markets in 2013

Posted on 13 February 2013 by VRS  |  Email |Print

A very common question always puzzles me as to how it can be answered as precisely as it is asked. At the beginning of every year analysts are popped a question, “How are commodity markets looking in the coming year?” Though the question is very simple the answer can’t be simple.
That’s because the commodity markets are a complex web of commodities driven by various segments of the economy and influenced by a wide array of fundamentals, from the weather to labour unrest, natural calamities to policy actions, and the health of the global economy and demand prospects. Let’s look at what could be in store for 2013………………………………………..Full Article: Source

High crude price biggest worry for global economy: IEA

Posted on 01 February 2013 by VRS  |  Email |Print

High Brent crude prices could dent a global economic recovery while Europe’s economy holds the key to determining world oil demand in 2013, the chief economist of the International Energy Agency said on Thursday.
Brent crude hovered near $115 per barrel on Thursday, not far from a more than three-month high, as the U.S. Federal Reserve’s pledge to stick to its bond-buying stimulus plan and upbeat Euro zone data fuelled optimism about oil demand. ……………………………………….Full Article: Source

China won’t cause a commodity crash (yet)

Posted on 22 November 2012 by VRS  |  Email |Print

Edward Morse at Citi (via Business Insider) has made a bearish call on the commodity supercycle based on a slowing Chinese economy and re-balancing growth away from infrastructure spending toward the consumer.
I beg to differ. The secular commodity bull cycle is not ending this cycle, but in the next downturn. That’s because the new leadership are not reformers, and these “princelings” are showing little inclination to re-balance growth away from SOEs and big ticket projects, where many of the elites made their money, toward the household sector, which would benefit the Chinese economy longer term but would gore the CCP cadres’ ox………………………………………..Full Article: Source

Bullish bets on commodities slide on slowdown fears

Posted on 30 October 2012 by VRS  |  Email |Print

Speculators lowered bullish wagers on commodities for the third straight week, the longest streak since April, as prices erased this year’s gain on mounting concern about slowing economic growth.
Hedge funds cut net-long positions across 18 US futures and options by 0.2% to 1.18 million contracts in the week ended October 23, the lowest since July 24, US Commodity Futures Trading Commission data show. Copper holdings fell the most in seven weeks, and sugar wagers dropped to a one-month low. Bullish bets on gold slumped the most in three months………………………………………..Full Article: Source

Protect against a commodities meltdown

Posted on 30 October 2012 by VRS  |  Email |Print

Booming growth in developing markets, coupled with inflationary money-printing in the U.S. and Europe, helped fuel a bull market in commodities for a dozen years. Today, though, Wall Street is flashing a yellow light: Commodity bugs had better scoot to avoid being squashed by the global slowdown.
“The secular bull market in commodities is done,” says Jeff Weniger, senior investment analyst at Harris Private Bank. “Finished. Kaput.” Don’t let the recent rise in prices for oil (partly caused by unrest in the Middle East) and corn (the drought in the Midwest) fool you………………………………………..Full Article: Source

China economy ‘clearly’ suffers, SocGen’s commodities chief says

Posted on 17 October 2012 by VRS  |  Email |Print

China’s economy is suffering as crisis in the developed economies begins to have a “knock-on effect” on the emerging markets, said Jonathan Whitehead, the global head of commodities markets at Societe Generale SA. (GLE).
“Clearly, China is suffering,” Whitehead said. “To what extent, we don’t know.” While outlook for commodities markets used to be defined by China’s economic growth, it now also largely depends on the developments in Europe, he said………………………………………..Full Article: Source

Commodities at risk as Euro crisis jitters threaten sentiment trends

Posted on 11 October 2012 by VRS  |  Email |Print

Commodity prices appear vulnerable to risk aversion driven by rising Eurozone sovereign stress. The Fed’s Beige Book is in focus on the economic calendar. Commodities came under pressure overnight as broad-based risk aversion plays out across financial markets.
The MSCI Asia Pacific regional benchmark equity index fell 0.8 percent. Newswires cited guidance in the third-quarter earnings report from Alcoa Inc as the catalyst for the dour mood. While the leading aluminum producer’s results beat analysts’ estimates after adjusting for a handful of special items, its forward guidance warned of the dangers posed by a slowdown in China and carried a downgrade in the outlook for demand………………………………………..Full Article: Source

Trading the commodity slump

Posted on 10 October 2012 by VRS  |  Email |Print

It could be due to mild dollar strength or outside market influence, but we’ve seen a number of declines in the commodity sector in recent weeks and months. I’m going to jump around to some of the major commodities, identify their moves of late and opine on whether they’re likely to continue heading south.
In the energy complex, crude oil has traded down from the $100-per-barrel level, shedding just over $10, or 10%. This move has happened within the last three weeks and, in my eyes, prices could see an additional $3 to $5 of deprecation before this leg is complete………………………………………..Full Article: Source

Commodity weakness doesn’t have to hit currencies

Posted on 09 October 2012 by VRS  |  Email |Print

When investors aren’t worrying about euro-zone survival, employment growth in the U.S., what Israel may be planning for Iran or what Iran may be planning for the Strait of Hormuz, they worry about the end of the commodity boom.
As realization slowly dawns that even China isn’t insatiable, and that slowing old economies eventually mean slowing new economies too, the currencies that benefited most from rising commodity prices attract ever more jaundiced scrutiny. Every week another ‘is the game up for the Australian dollar?’ piece appears, with metronomic regularity, from one analyst’s cloister or another………………………………………..Full Article: Source

Commodities may fall on euro belt-tightening

Posted on 01 October 2012 by VRS  |  Email |Print

Commodities are on the upswing in early trade amid a broad-based advance in risk appetite as traders encouraged by yesterday’s release of an ambitious Spanish budget await a similar result from France. Sentiment-linked crude oil and copper prices are following shares higher while gold and silver are buoyed by ebbing haven demand for the US dollar.
Optimism may be fleeting however. Economists expect Paris will run a deficit equivalent to 4.6% percent of GDP this year, the highest among the core members of the euro zone. This means President Francois Hollande and company may be forced to press on with tax hikes and/or spending cuts, both of which would compound headwinds for already anemic growth………………………………………..Full Article: Source

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Commodities drop on demand concerns amid Europe discord on debt

Posted on 25 September 2012 by VRS  |  Email |Print

Jonathan BarrattCommodities fell, heading for the first monthly decline since May, as discord over Europe’s debt crisis and fading business optimism in China pointed to a deeper slowdown that may reduce demand for energy, metals and grains.
The Standard & Poor’s GSCI Spot Index of 24 raw materials fell 0.9 percent to settle at 657.68 at 4 p.m. New York time, led by cocoa, silver and aluminum. The gauge slid 4.4 percent last week, the most since June 1, and has dropped 2.6 percent this month………………………………………..Full Article: Source

Central banks push, but commodities slide

Posted on 24 September 2012 by VRS  |  Email |Print

Not to be left out, the Bank of Japan (BoJ) this week announced its own new version of monetary stimulus, although the move is relatively mild compared to the U.S. Federal Reserve’s QE3. The BoJ is increasing current asset purchases from 45 trillion yen to just 55 trillion yen (an increase equal to about $127 billion dollars).
Japan’s central bank is attempting to decrease the value of the yen, which has been rising since March. Unfortunately for Japanese exporters, the effect so far has been fleeting. In the first chart, you can see the overnight reaction to the easing announcement………………………………………..Full Article: Source

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Commodities: US drought threatens volatility for next 12 months

Posted on 21 September 2012 by VRS  |  Email |Print

Blu PutnamThe worst US drought in 50 years has sent commodity prices in grain and livestock to record highs, and in spite of a drop-back in prices, traders say volatility is to be expected for as much as another year. As of September 4, the soya bean price was up 32% and that for corn up 45% since the end of May.
The effects are not only being felt in ethanol production and livestock feed. According to farmers in the western states, large numbers of horses are dying as pastures are completely dry and ranchers cannot afford to buy hay at present prices. “People don’t realize how bad it is because horses are not part of the food chain, but the drought has resulted in a lot of animals just starving to death,” says one farmer………………………………………..Full Article: Source

China slump hits commodities; GDP growth vital:SocGen

Posted on 21 September 2012 by VRS  |  Email |Print

Patrick Legland, global head- research, Societe Generale, explains that the slowdown in China will certainly have an adverse effect on commodities. He adds that though European economies reduced deficit significantly, the growth in GDP which is essential to reduce debt, remained anemic and negative.
Globally, the economic indicators have been poor. The PMI in Europe was very poor. Asia is very weak as well. Clearly investors are back in the doldrums on nickel due to economic inflows. So, right now there is certainly a break in the rally………………………………………..Full Article: Source

Financial investment causing commodity price volatility: UN report

Posted on 20 September 2012 by VRS  |  Email |Print

Financial investment is having a much greater impact on the prices of commodities like oil than underlying supply and demand of the commodity, causing price volatility and allowing prices to become removed from the fundamentals for long periods of time, according to a report by the United Nations Conference on Trade and Development.
This has effectively transformed commodity markets into financial markets and demands a “strong and prompt policy and regulatory response,” UNCTAD said……………………………………….Full Article: Source

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Volatile commodities may need intervention-U.N.

Posted on 19 September 2012 by VRS  |  Email |Print

Governments should let regulators step into commodity markets to pop price bubbles, prevent crashes and combat powerful financial investors, a U.N. report showed on Tuesday, a day after a sudden oil price plunge baffled traders.
Financial players such as hedge funds and high-frequency traders are to blame for increased volatility in commodity prices and urgent action should be taken to increase transparency and boost regulators’ powers, the paper said………………………………………..Full Article: Source

End of commodity boom may be good for Australia

Posted on 12 September 2012 by VRS  |  Email |Print

Have Australians got it wrong by bemoaning what’s been called the end of the commodities boom, which may turn out to be another bit of good fortune for the nation known as the lucky country? The decision to cut capital spending by Fortescue Metals Group, probably the country’s most bullish iron ore miner, has been viewed as another nail, if not the final one, in the coffin of the once-in-a-generation resources extravaganza.
News that the economy expanded 3.7% in the year ended June 30 wasn’t enough to temper the feeling that Australia’s best days may be behind it, especially given the leverage of the economy to the now slowing Chinese giant………………………………………..Full Article: Source

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Commodity rout is no global financial crisis moment

Posted on 06 September 2012 by VRS  |  Email |Print

Just to get you into the right mood for what follows, here’s one forecast for commodity prices at the end of next year. Copper at $US5000 a tonne (against $US7635 at Tuesday’s close on the London Metal Exchange), lead $US1500/tonne ($US1995 on Tuesday), nickel $US13,500/tonne (US$15,950 now), tin $US17,500/tonne ($US19,625 now) and zinc down from $US1877/tonne on Tuesday to $US1450 in December next year.
The good news in these predictions from Capital Economics in London is that the declines as forecast would be nowhere near as bad as in the GFC, but that may be seen as scant comfort………………………………………Full Article: Source

Why commodity prices will collapse by 2015

Posted on 06 September 2012 by VRS  |  Email |Print

For the past two years, as regular readers know, I have been bearish on hard commodities. Prices may have dropped substantially from their peaks during this time, but I don’t think the bear market is over. I think we still have a very long way to go.
There are four reasons why I expect prices to drop a lot more.  First, during the last decade commodity producers were caught by surprise by the surge in demand.  Their belated response was to ramp up production dramatically, but since there is a long lead-time between intention and supply, for the next several years we will continue to experience rapid growth in supply………………………………………Full Article: Source

Will Australia face a commodities price crisis?

Posted on 05 September 2012 by VRS  |  Email |Print

Australia has rode out the economic crisis storm fairly well over the past few years, but will the recent decrease in commodities prices be its downfall? If we put aside for one moment the RBA’s use of the concept of trend growth -proof in itself that Australia has escaped many of the effects of the credit crunch era so far!- we see that she saw an expansion in her commodity sector in the first part of 2012.
Expanding into a possible slow down has its own dangers and regular readers of this blog will be aware that one of Australia’s main customers China is slowing down. Only this weekend we received news that even the official Chinese purchasing managers index is now showing a contraction………………………………………Full Article: Source

Barclays makes GBP500mln out of global food crisis

Posted on 03 September 2012 by VRS  |  Email |Print

Barclays has made as much as half a billion pounds in two years from speculating on food staples such as wheat and soya, prompting allegations that banks are profiting handsomely from the global food crisis.
Barclays is the UK bank with the greatest involvement in food commodity trading and is one of the three biggest global players, along with the US banking giants Goldman Sachs and Morgan Stanley, research from the World Development Movement points out………………………………………..Full Article: Source

Time to have a plan for the next commodities bust

Posted on 24 August 2012 by VRS  |  Email |Print

The global financial crisis created its fair share of villains. But it also produced a few superstars, those who saw the crash coming, bet accordingly and made a fortune.
People like Michael Burry, David Einhorn, and Canada’s own Prem Watsa saw their material and reputational worth skyrocket as a result of immensely contrarian investment decisions they made linked to the credit crisis………………………………………..Full Article: Source

Rising soft commodity prices pose threat to European companies

Posted on 15 August 2012 by VRS  |  Email |Print

Bioenergy companies and protein producers will be the main victims among EMEA corporates from record soft commodity prices, ratings company Fitch warned Tuesday.
The ratings agency attributes soaring prices to the worst U.S. drought in decades, which is ongoing, ravaging both the corn and soybean crops alike as they undergo a crucial pollination phase, when moisture has the greatest effect on eventual yields………………………………………..Full Article: Source

Global food reserves falling as drought wilts crops: Commodities

Posted on 09 August 2012 by VRS  |  Email |Print

Barack ObamaStockpiles of the biggest crops will decline for a third year as drought parches fields across three continents, raising food-import costs already forecast by the United Nations to reach a near-record $1.24 trillion.
Combined inventories of corn, wheat, soybeans and rice will drop 1.8 percent to a four-year low before harvests in 2013, the U.S. Department of Agriculture estimates. Crops in the U.S., the biggest exporter, are in the worst condition since 1988, heat waves are battering European crops and India’s monsoon rainfall already is 20 percent below normal. The International Grains Council began July by forecasting record harvests. It ended with a prediction for a 2 percent drop in output………………………………………..Full Article: Source

US drought impacts global food security

Posted on 09 August 2012 by VRS  |  Email |Print

Shenggen FanThe United States is the leading producer of corn and soybeans – two commodities that developing countries rely on. However, over the past two months, prices have risen sharply as the U.S. experiences its worst drought since the 1950s. A food policy expert says effectively responding to the drought can help prevent another global food crisis
More than half the United States is experiencing the dual problems of too little rain and temperatures that are too high. Shenggen Fan, head of the International Food Policy Research Institute, said that’s not only driving up prices, but contributing to price volatility as well………………………………………..Full Article: Source

China July commodity imports likely fell sharply

Posted on 09 August 2012 by VRS  |  Email |Print

China’s metal imports are likely to fall sharply in July as a seasonal lull in the construction season has coincided with a broad economic slowdown and a lack of opportunities to profit from trade arbitrage.
China is the world’s largest buyer of key industrial commodities and its order book is an important indicator of global demand. Customs officials will release July data Friday. Imports of iron ore, China’s largest class of metal imports by value, are likely to continue sliding after an 8.7% decline in June from May………………………………………..Full Article: Source

Is the commodities boom over?

Posted on 30 July 2012 by VRS  |  Email |Print

The world’s economy is passing through a low growth environment and this is in stark contrast to the first half of the last decade, when we had a global boom. Today, Europe is on the brink of recession, the US economy is growing at only 2% per year and it appears as though China is facing a major slowdown.
Given these circumstances, we are of the view that the prices of natural resources will struggle to retain last decade’s momentum. ……………………………………….Full Article: Source

Commodities may weaken on fading QE3 bets

Posted on 17 July 2012 by VRS  |  Email |Print

Commodity prices are correcting lower in early European trade after Friday’s sharp rebound in risk appetite. Sentiment-linked crude oil and copper prices followed share prices higher while gold and silver found a de-facto boost as the safe-haven US Dollar retraced downward.
A quiet economic calendar in Europe turns traders’ attention to the US docket. Expectations call for narrow improvement in the Empire Manufacturing gauge - the first of July’s regional activity surveys to hit the tape - while Retail Sales snap a two-month losing streak to post a narrow gain in June………………………………………..Full Article: Source

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Commodities sink as global slowdown fears grip financial markets

Posted on 13 July 2012 by VRS  |  Email |Print

Commodity prices are trading sharply lower as risk aversion grips financial markets amid worries about slowing economic growth after minutes from June’s FOMC meeting failed to advance expectations of a QE3 program to be unveiled in the near term.
The Bank of Japan likewise disappointed on the stimulus front, opted to reshuffl e funds between the credit-loan and asset-purchase programs instead of expanding accommodative measures………………………………………..Full Article: Source

Good news in falling commodities

Posted on 11 July 2012 by VRS  |  Email |Print

Commodity prices have fallen in the last few weeks; the S&P/GSCI, an index of commodity prices, is down by 10 per cent in US dollar terms since the end of April. Whether that’s good or bad for equities depends largely on your time horizon.
Theory linking shraes and commodities is ambiguous. The good news is that lower commodity prices raise the disposable incomes of commodity users; they are, in economic jargon, a positive supply shock. The bad news is that they can be a signal of weaker global demand for commodities and hence of weaker world output………………………………………..Full Article: Source

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As China slows, commodities shudder

Posted on 02 July 2012 by VRS  |  Email |Print

Indications that China’s economy is beginning to flag more than expected could be a nasty thorn in the side of the commodities sector as hopes for the global economy weaken, analysts said.
China, the world’s largest consumer of industrial commodities like copper and iron ore and the second-thirstiest oil consumer after the U.S., has long been viewed as the white knight of the commodity markets………………………………………..Full Article: Source

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