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Soybean Futures Prices Tumble to Nearly Four-Year Low

Posted on 27 August 2014 by VRS  |  Email |Print

Soybeans fell to their lowest intraday price for a front-month contract in almost four years, as September futures near expiration, spurring investors to close out their positions. The so-called first-notice day is Friday, when investors who had bought contracts betting on rising price trend may be required, depending upon terms of their original transaction, to take delivery of the soybeans.
To avoid taking delivery, contract holders must sell and either liquidate their position or roll their investment into a future month. The September contract expires on Sept. 12. The bulk of soybean futures contracts traded on commodities exchanges don’t end in delivery of the underlying product………………………………………..Full Article: Source

ICAP launches Singapore coal derivatives trading

Posted on 22 August 2014 by VRS  |  Email |Print

ICAP, the world’s largest interdealer broker, has opened a coal derivatives trading desk in Singapore in a move that highlights the growing importance of the Asian city-state as a commodities trading hub amid robust Chinese demand for coal. It is another sign of London-based ICAP’s ambitions to tap increasing demand in Asia for hedging of physical purchases of commodities.
In May the company launched an electronic trading platform for iron ore swaps in Singapore, in part to capture demand from Chinese traders………………………………………..Full Article: Source

CME to Start EU Gas Futures as Trayport Remains Independent

Posted on 06 August 2014 by VRS  |  Email |Print

CME Group Inc. plans to start U.K. and Dutch natural gas futures while keeping the energy trading platform it agreed to buy from GFI Group Inc. independent. The world’s biggest derivatives exchange may offer gas trading at the U.K.’s National Balancing Point and the Title Transfer Facility in the Netherlands as early as next month, Martin Fraenkel, CME’s managing director for International Energy, said.
The expansion means the Chicago-based bourse will rival other exchanges that feed prices into the Trayport Ltd. system it agreed to buy last week………………………………………..Full Article: Source

CME Group to Acquire Trayport and FENICS from GFI Group

Posted on 31 July 2014 by VRS  |  Email |Print

CME Group, the world’s leading and most diverse derivatives marketplace, and GFI Group Inc., a leading intermediary and provider of trading technologies and support services to the global OTC and listed markets, today announced that they have entered into definitive agreements to create value for their respective stockholders through a two-step transaction through which:
CME Group will acquire Trayport and FENICS. CME Group will purchase these businesses by first acquiring all of the outstanding shares of GFI Group in exchange for $4.55 per share in CME Group Class A Common Stock which represents a 46% premium above yesterday’s closing price of $3.11 per share of GFI Group common stock………………………………………..Full Article: Source

Global oil demand growth is forecast to accelerate to 1.4 mb/d in 2015

Posted on 14 July 2014 by VRS  |  Email |Print

Oil futures surged in mid‐June by $5/bbl to a nine-month high of more than $115/bbl for Brent as Islamist forces gained ground in Iraq, but later reversed their gains on confidence that Baghdad’s southern fields would remain untouched and improved prospects for a recovery in Libyan exports. Brent last traded at $108/bbl, WTI at $102/bbl.
OPEC supplies were virtually unchanged in June at 30.03 million barrels per day (mb/d), as lower Iraqi production offset gains in Saudi Arabia, Iran, Nigeria and Angola. The ‘call’ on OPEC for 2H14 was cut by 350 000 barrels per day (350 kb/d) to 30.6 mb/d on improved non‐OPEC supply and lower demand, and is forecast to dip to 29.8 mb/d in 2015 from 29.9 mb/d in 2014. ……………………………………….Full Article: Source

India: Survey gives a boost to commodity futures

Posted on 10 July 2014 by VRS  |  Email |Print

Economic Survey 2013-14 has given a thumbs-up to commodity futures, saying, “Commodity futures trading is essential for a modern food sector, as it generates forecasts about future prices that shape sowing and storage decisions across the country.” This comes as relief for market participants, as most feared harsh action related to essential commodities. A 2011 report by a committee headed by then Gujarat chief minister Narendra Modi had opposed futures trade in essential commodities.
The survey, recommended, “Procurement agencies can use this platform to their benefit by hedging their future requirements on a regular basis, according to the provisions of the NFSA (food security Act)”……………………………………….Full Article: Source

Gold Option Trade: Will Gold Continue To Consolidate?

Posted on 07 July 2014 by VRS  |  Email |Print

Until recently, the world has forgotten about Gold and gold futures prices it would seem. A few years ago, all we heard about was gold and Silver futures making new highs on the back of the Federal Reserve’s constant money printing schemes. However, after a dramatic selloff in the world of precious metals it became very quiet.
Gold prices have been in a giant basing or consolidation pattern for more than one year. As can clearly be seen below, gold futures prices have traded in a range between roughly 1,175 and 1,430 since June of 2013………………………………………..Full Article: Source

Water – Hot commodity of the future?

Posted on 03 July 2014 by VRS  |  Email |Print

Why trading water futures could be in our future? In the next quarter century, demand for water will boom as the world population swells. This liquid gold is expected to be traded like oil. Already commodity experts are brainstorming on how to create a marketplace for water futures.
Water is the one natural resource required to sustain all life on the planet, making it already the most important commodity on Earth. Although it has been fought over, sold, diverted, dammed, claimed by governments and overseen by authorities, Wall Street has never really gotten its hands in it the way it has with, say, oil………………………………………..Full Article: Source

Derivatives House of the Year: Citi

Posted on 06 June 2014 by VRS  |  Email |Print

While other banks are nervously pulling back from commodity and energy derivatives trading, Citi is boldly pushing ahead. With so many major players withdrawing from all or part of the market during the past few years, commodity and energy trading suddenly seems like a hostile environment for investment banks.
But at a time when so many banks are scaling back their ambitions in commodity and energy derivatives, Citi stands out for a level of commitment that has baffled some of its less bullish rivals. As other banks nervously pull back, Citi is boldly pushing ahead………………………………………..Full Article: Source

Citi Wins Commodity Derivatives House of the Year from Energy Risk

Posted on 05 June 2014 by VRS  |  Email |Print

Citi has won the award for best commodity derivatives house from Energy Risk, the highly-respected commodities publication. The Energy Risk Awards celebrate excellence across the global commodity and energy markets and are determined by a judging panel consisting of the Energy Risk editorial team and external industry experts.
“We are delighted and honoured to have been recognised by Energy Risk with this award. It underlines the progress that Citi has made in the last several years in building a commodities business that is not only an industry leader but also the right business for Citi in the new regulatory environment,” said global head of commodities Stuart Staley………………………………………..Full Article: Source

India: Banks can wait to trade in commodity futures

Posted on 27 May 2014 by VRS  |  Email |Print

At a time when the Government is keen to fight inflation, readying to reform the commodity market and reduce the role of speculative capital, it is incongruous that a Finance Ministry panel should recommend that commercial banks and foreign institutional investors should be allowed to enter the commodities futures market. Currently, banks, mutual funds and FIIs are not allowed to trade commodity futures; and the market is none the worse for it.
Way back in 2006, the Gupta Committee report released by Reserve Bank of India argued in favour of allowing banks, MFs and FIIs to trade commodity futures. The policymakers kept the recommendation on hold, and for good reasons………………………………………..Full Article: Source

Agri futures market expands

Posted on 27 May 2014 by VRS  |  Email |Print

With the expansion of the derivatives market for agricultural commodities,the Forward Markets Commission (FMC) aims to move towards making India a price setter in those products where it has been an influential producer.
In precious metals such as gold and silver, futures prices traded on the Multi Commodities Exchange (MCX) are already influencing international markets. And, markets abroad are taking note of movements in agri commodities such as cotton and soybean, since trade in these have been permitted in the evening session, too………………………………………..Full Article: Source

How To Buy Gold Options

Posted on 21 May 2014 by VRS  |  Email |Print

Buy gold options to attain a position in gold for less capital than buying physical gold or gold futures. Gold options are available in the U.S. through the Chicago Mercantile Exchange (CME), so if you’ve wondered how to invest in gold, here’s a shorter-term and less capital intensive way to do it.
Use options to profit whether gold prices rise or fall. Believe the price of gold will rise? Buy a gold call option. A call option gives the right, but not the obligation, to buy gold at a specific price for a certain amount of time (expiry). The price you can buy gold at is called the strike price…………………………………..Full Article: Source

Coffee Futures Buoy Commodity Indexes in 2014

Posted on 16 May 2014 by VRS  |  Email |Print

For the last few years, commodities have dragged behind surging equities as it seemed that the commodity supercycle was beginning to cool off. However, 2014 has seen broad commodity indexes outpace equities. Beating gains of just over 2% in a little more than four months isn’t anything to write home about, but hard assets are holding their own nonetheless. However, most commodity indexes are benefiting from one hard asset in particular — coffee.
Coffee futures have had a rough go over the past few years, losing 12%, 43%, and 33% in 2011, 2012, and 2013, respectively. Thanks to a drought in Brazil, where the vast majority of coffee beans are produced, prices have been surging in 2014. ……………………………………….Full Article: Source

The importance of storage rates in commodity trade

Posted on 08 May 2014 by VRS  |  Email |Print

Commodity futures market convergence is the process where prices in the spot and futures markets come together or converge at futures market expiration. Convergence occurs at the expiry date of every futures contract because of arbitrage. If spot prices remain below futures prices, a market participant could buy in the spot market and sell in the futures market and make a risk-free profit.
Similarly, if the spot price is above the futures price, a market participant can buy in the futures market, take delivery and sell in the spot market and earn a risk free-profit………………………………………..Full Article: Source

Shanghai bourse plans to launch base metals index contract

Posted on 25 April 2014 by VRS  |  Email |Print

The Shanghai Futures Exchange (ShFE) plans to launch a futures contract on a base metals index as part of steps to internationalise its business, Chairman Maijun Yang said on Thursday.
ShFE is China’s biggest exchange for base metals, already trading copper, zinc, aluminium and lead. It said last year it also has plans to trade nickel and tin. Yang did not provide a timeframe for the new contracts………………………………………..Full Article: Source

India: Commodities futures trade volumes fall for second year

Posted on 09 April 2014 by VRS  |  Email |Print

Commodity futures trading volumes in India fell 40.49 percent in the year to March 2014, its second straight year of decline, the market regulator said on Tuesday.
In value terms, futures trading at commodity exchanges fell to 101.44 trillion rupees in the first twelve months from April 2013 from 170.46 trillion rupees a year ago, the Forward Markets Commission said in a statement on its website………………………………………..Full Article: Source

US futures regulator to examine high-frequency traders

Posted on 04 April 2014 by VRS  |  Email |Print

The U.S. Commodity Futures Trading Commission is investigating high-frequency traders to see if they were breaching the derivatives regulator’s rules, its chief said Thursday.
“Staff (is) responding to concerns brought to us about certain practices, whether it be spoofing just to give one example, whether that’s running afoul of our rule,” Acting Chairman Mark Wetjen told reporters during a meeting. “And then whether or not it meets the definition of manipulative activity under our statute,” he said………………………………Full Article: Source

Oil futures dip on continued demand concerns

Posted on 03 April 2014 by VRS  |  Email |Print

Oil prices declined Wednesday as a drop in U.S. supply failed to erase traders’ fears about sluggish demand. U.S. crude-oil supplies fell last week for the first time in 11 weeks, the U.S. Energy Information Administration said, upending analyst expectations. But traders wrote off the drop as a one-week aberration–a closure of the Houston Ship Channel between March 22 and March 25 limited imports of crude oil and required refiners to draw more supplies from storage.
Inventories likely will rise again next week, said Andy Lipow, president of Lipow Oil Associates in Houston. Demand for crude oil typically falls in March as refineries shut down units for seasonal maintenance…………………………………Full Article: Source

CFTC steps up probe of ‘exchange for futures’ deals

Posted on 24 March 2014 by VRS  |  Email |Print

The US derivatives watchdog has warned market participants of potential legal charges as it escalates a probe into more than a million energy, metals, foreign exchange and other swap transactions.
Commodity Futures Trading Commission staff have sent “Wells notices” as they examine a broad category of transactions that includes “exchanges of futures for swaps,” or EFSs, three people familiar with the matter said………………………………………..Full Article: Source

China looks beyond commodity derivatives with equity options launch

Posted on 21 March 2014 by VRS  |  Email |Print

Commodities have been the mainstay of China’s derivative markets so far but the launch of equity options on two of the country’s main exchanges could see this dominance challenged.
Although the first commodity-linked futures contract in China was traded in March 1991 on the Zhengzhou Commodity Exchange, the development of other asset classes including equity-linked futures and options products has lagged markedly with the first futures contract referencing the CSI 300 index, an index of 300 Shanghai and Shenzhen listed A-shares, launched as recently as 2010 on the China Financial Futures Exchange (CFFEX)………………………………………..Full Article: Source

SGX commodity derivatives up 70pct last year

Posted on 21 March 2014 by VRS  |  Email |Print

Commodity derivatives traded via the Singapore Exchange (SGX) rose by 70 per cent last year, outpacing the global growth rate of 23 per cent, SGX said on Thursday.
It said over-the-counter (OTC) Iron Ore was its most popular commodity derivatives contract, with the number of lots traded rising by 166 per cent to 584,157 lots. The highest percentage growth was generated by OTC Rubber, which grew 278 per cent to 2,778 lots………………………………………..Full Article: Source

CME Group to launch North American aluminum futures

Posted on 19 March 2014 by VRS  |  Email |Print

CME Group, the world’s leading and most diverse derivatives marketplace, announced today it will launch North American physically delivered Aluminum futures contracts to begin trading on May 5, 2014, pending all regulatory approvals.
This new contract will build on CME Group’s existing suite of base metals products, including the Aluminum MW U.S. Transaction Premium Platts (25MT) futures contract, which was introduced in April 2012. These new Aluminum futures contracts will offer global aluminum market participants a new tool for managing their exposure to volatile North American prices, while giving them access to physical aluminum at a number of CME Group-approved warehouses across the U.S. (Press Release)

Big gold futures buying pushing market higher

Posted on 18 March 2014 by VRS  |  Email |Print

Gold’s strong rebound upleg this year has been driven by big gold-futures buying. After abandoning gold last year, American futures speculators are returning to the yellow metal in droves. These capital inflows are a very bullish harbinger, as major futures buying is the primary fuel for young gold uplegs before investors return to take the baton. And this big gold-futures buying is likely less than half done!
From a pure fundamental supply-and-demand standpoint, gold’s crushing losses last year were solely attributable to record gold-ETF selling by stock traders………………………………………..Full Article: Source

Why coffee futures are up 80pct in 2014

Posted on 18 March 2014 by VRS  |  Email |Print

After commodities had a rough go in 2013, taking the backseat to surging equities, it seems that this year has more favorable conditions in store for a number of hard assets. Though a number of commodities have gotten off to a white-hot start this year, none have even come close to the gains that coffee futures have notched, as that commodity has spiked more than 80% through the first 10 weeks of the year.
Coffee on the Rise: Futures for coffee are currently hovering at a fresh two-year high, as production in the world’s most vital region has spooked investors. Brazil is, by far, the largest producer of coffee on an annual basis………………………………………..Full Article: Source

Shanghai to open up trading of commodities futures

Posted on 13 March 2014 by VRS  |  Email |Print

The Shanghai Futures Exchange is vying for more influence in the global market with plans to open up trading of its long-awaited crude oil futures and a number of other commodities futures to foreign investors.
“China is a big importer of crude, and we rely 60 per cent on crude imports. However, our influence in the global pricing of crude oil has been low, and it doesn’t match with our big consumption,” exchange chairman Yang Maijun said………………………………………..Full Article: Source

EU derivatives rules sow confusion in metals markets

Posted on 27 February 2014 by VRS  |  Email |Print

New European Union rules designed to bring stability and clarity to opaque derivatives markets are sowing confusion among metals brokers, raising more questions than answers for clients and throwing the fate of smaller firms into doubt.
The bloc’s European Market Infrastructure Regulation (EMIR) is a package of reforms drawn up in response to the global financial crisis, in which less regulated market conditions allowed contagion to spread quickly………………………………………..Full Article: Source

Preparing for the unexpected with commodity futures ETFs

Posted on 25 February 2014 by VRS  |  Email |Print

Three straight years of negative returns for broad commodity benchmark indices, such as the Dow Jones-UBS Commodity Total Return Index, have led some investment advisers (and their clients) to begin questioning the rationale for including commodity futures ETFs in their asset allocation models.
Relatively tame inflation expectations seem to support these doubts, as commodities are often thought of as a hedge against inflation. However, the fact that inflation expectations are so low may actually highlight one of the most important reasons for maintaining (or adding) a strategic allocation to commodity futures ETFs: in order to hedge against unexpected inflation………………………………………..Full Article: Source

India: Commodities, securities norms to converge

Posted on 14 February 2014 by VRS  |  Email |Print

With the commodities derivatives regulator, Forward Markets Commission (FMC), now under the finance ministry, rules governing the commodities markets are being converged with the securities derivatives’, wherever there are similarities.
One is to disallow commodity exchanges from having different transaction charges for different brokers. In securities, irrespective of volumes, the charges are similar for all brokers. However, the FMC has allowed exchanges to have different transaction charges for deliverable commodities………………………………………..Full Article: Source

Gold seen rising to $1,400 on 100-day average by Citi Futures

Posted on 12 February 2014 by VRS  |  Email |Print

Gold prices are poised to extend their 2014 rebound and reach $1,400 an ounce, the highest since September, according to technical analysis from Citi Futures and RBC Wealth Management.
Prices yesterday settled above the 100-day moving average for a second straight day for the first time since October. The metal has also closed above its 50-day measure in every session since Jan. 23. The pattern signals prices will rally 8.5 percent by the end of March, Chicago-based Sterling Smith of Citi Futures said………………………………………..Full Article: Source

Iron ore derivatives see growth spurt

Posted on 11 February 2014 by VRS  |  Email |Print

Call it a theory of evolution for commodities. First, prices are set on long term contracts; then indexation and the spot market take over. Then derivatives emerge.
Since the 1970s and 1980s all the major raw materials from oil to coal to copper have followed this evolutionary path with one notable exception – iron ore………………………………………..Full Article: Source

India: Commodity futures regulator to allow trading by bourse shareholders

Posted on 07 February 2014 by VRS  |  Email |Print

The commodity derivatives market regulator, Forward Markets Commission (FMC), is in the process of relaxing curbs to help brokers with a small shareholding in an exchange to start trading on it.
Chairman Ramesh Abhishek said at an Assocham conference here on Thursday that “the guidelines do not allow brokers with shareholdings in exchanges to trade even if these are in some other exchanges. We are in discussions with the government to change these. We feel brokers with up to two per cent or some such percentage can be allowed to trade as long, as they have no say in the management or on the board.”……………………………………….Full Article: Source

Derivatives industry: Have they destroyed demand-supply fundamentals in commodities?

Posted on 10 January 2014 by VRS  |  Email |Print

Inflation is a dreaded word for most policy makers and analysts apart from being a constant worry for India’s aam aadmi. However, there is still no clarity as who is the villain in this game: big traders, middlemen, players in commodity derivatives including index investors.
I was just going through a working paper of Reserve Bank of India titled ‘Global Liquidity, Financialisation and Commodity Price Inflation’ by Kumar Rishabh and Somnath Sharma……………………………..Full Article: Source

India: The future of futures

Posted on 03 January 2014 by VRS  |  Email |Print

If mentha oil and potato trade are anything to go by, futures are changing physical markets for the better. Way back in 1875, the Bombay Cotton Trade Association initiated commodity futures trading to India.
This happened just a a decade after trading in similar products began at the Chicago Board of Trade, the world’s first modern commodity futures exchange. Underlying the booming futures trading in cotton was a spurt in cotton exports from India to Europe, after supply from the US was disrupted due to the Civil War………………………………………..Full Article: Source

Commodities futures explained

Posted on 19 December 2013 by VRS  |  Email |Print

There is much confusion about the various types of commodities related investment vehicles. They sound alike but have scant similarity in construction, function and performance. Commodities futures and managed futures (including financial index futures) are sold by commodities brokers. ETFs, managed futures mutual funds, and certain commodity indices are sold by stock brokers.
Commodities futures are contracts to buy or sell, at a predetermined price and date, a set amount of a commodity including: grains, meats, metals, energies, softs, stock indexes, financials and currencies. Futures’ liquidity and price discovery is found in worldwide markets that trade 24/7………………………………………..Full Article: Source

HKEx plans to launch new commodities futures in 2H 2014-company official

Posted on 29 November 2013 by VRS  |  Email |Print

Hong Kong Exchanges and Clearing (HKEx) plans to launch new commodities futures contracts in the second half of next year, an official said on Wednesday. The new contracts HKEx is targeting include iron ore and coking coal, and are designed to feed off the region’s strong physical trade flows as the exchange aims to boost volumes and attract new members, the company official said.
“We do plan to start listing futures products in Hong Kong, probably in the second half of next year,” Romnesh Lamba, co-head of the global markets division, said at a conference………………………………………..Full Article: Source

BSE launches currency derivatives trading platform

Posted on 29 November 2013 by VRS  |  Email |Print

Country’s premier stock exchange BSE today became the fourth bourse in the country to have a platform for trading in currency and interest rate derivatives. BSE will now allow the rupee pair trading in dollar, euro, pound and the yen on the new currency derivatives segment.
To begin with, currency options trade will be on dollar-rupee contracts, which will be without charges for the first six moths. With this the BSE becomes the fourth stock exchange in the currency derivatives segment after the NSE, MCX-SX and United Stock Exchange………………………………………..Full Article: Source

What does OPEC think about the future of oil?

Posted on 18 November 2013 by VRS  |  Email |Print

The new ‘World Oil Outlook’ report from Opec, according to its secretary-general Abdullah Salem Al Badri, “aims to share Opec’s views on the world’s energy prospects, and its associated challenges and opportunities.” The report, in its seventh edition, “discusses the principal issues that could shape the future of the global energy markets, particularly in relation to oil.”
The report assumes oil prices to remain stable in the long run as the rising cost of the marginal barrel would prevent their drop and, therefore, in nominal terms, a $110 per barrel on average up to 2020 and then rising gradually to $160 a barrel by 2035…which is only $100 a barrel in real terms………………………………………..Full Article: Source

Benefits of trading in commodity futures

Posted on 12 November 2013 by VRS  |  Email |Print

Commodities have become an established asset class in the Indian markets in the past few years. While futures trading is relatively new to the Indian commodity markets, the global commodity futures exchanges have been functioning for several decades.
What has attracted investors to trading in commodity futures is the transparency in the price mechanism, low margins, risk management, benefits to farmers by way of price clarity and an organised marketplace………………………………………..Full Article: Source

China securities watchdog says conditions ripe for commodity options

Posted on 28 October 2013 by VRS  |  Email |Print

Conditions are ripe for the launch of commodities options, China’s securities regulator said on Friday, a sign that it will soon approve some of the options contracts proposed by local futures exchanges.
China’s securities watchdog currently bars options trading, but all of China’s commodity exchanges, including the Dalian Commodities Exchange, the Zhengzhou Commodities Exchange and the Shanghai Futures Exchange, have lodged proposals to launch options on some of their contracts………………………………………..Full Article: Source

U.S. swaps regulator to vote on commodity limits rule

Posted on 24 October 2013 by VRS  |  Email |Print

The U.S. derivatives regulator will meet next month to adopt a rule that will curtail Wall Street’s ability to speculate with commodities, a measure investment banks are fighting in court. The Commodity Futures Trading Commission is revising the rule on so-called position limits, even as its lawyers are preparing to defend an earlier version knocked down by a U.S. court last year.
But Mark Wetjen, one of the CFTC’s four commissioners, said this week that the dual strategy of pursuing the appeal and a new rule at the same time was not necessarily the best, and that the agency could drop the appeal………………………………………..Full Article: Source

China seeks pricing say with iron ore futures

Posted on 18 October 2013 by VRS  |  Email |Print

China’s Dalian Commodity Exchange on Friday will launch the country’s first iron ore futures with physical delivery, to gain more pricing power on the commodity. Chinese steel makers are the world’s biggest iron ore buyers. Volatile iron ore prices have exposed steel makers to risks.
Chinese steel makers suffered losses from volatile iron ore prices and futures provide hedging tools for domestic steel makers and spot traders, said Zhang Yichen, an analyst with Yongan Futures Research Academy. The futures also help Chinese steel makers gain pricing power………………………………………..Full Article: Source

China to trade iron ore futures

Posted on 16 October 2013 by VRS  |  Email |Print

China’s Dalian Commodity Exchange will start trading the country’s first iron ore futures for physical delivery this week, challenging index-backed contracts by CME Group Inc. and Singapore Exchange Ltd. Trading will begin Friday after the securities regulator approved the plan last week, the bourse in the northeastern port city said.
Chinese steelmakers, the world’s biggest iron ore buyers, earlier this year questioned the reliability of a price index provided by Platts that became a benchmark after producers including Vale SA and Rio Tinto Group scrapped annual contract price talks in 2010. China started its own spot trading platform last year, introducing a weighted average daily price in March………………………………………..Full Article: Source

Investment basics: Commodity futures

Posted on 14 October 2013 by VRS  |  Email |Print

Commodities are priced and traded among buyers and sellers in an equivalent manner regardless of where the commodity was produced or by whom. Examples of commodities would include corn, soybeans, oil and copper. The price of copper is virtually the same throughout the world, and fluctuates daily based on global supply and demand.
A commodity futures market (or exchange) is, in simple terms, nothing more or less than a public marketplace. The purchase and sale of a commodity, which must be made through a broker who is a member of an organized exchange, are made under the terms and conditions of a standardized futures contract………………………………………..Full Article: Source

CME applies to create commodities swap execution facility

Posted on 19 September 2013 by VRS  |  Email |Print

CME Group Inc., the owner of the world’s largest futures market, applied to create a new kind of venue known as a swap execution facility that will initially focus on trading commodities derivatives.
The Chicago-based exchange operator said today that it’s seeking U.S. Commodity Futures Trading Commission permission to form the market. Other companies that have asked for or received approval to create one include IntercontinentalExchange Inc., ICAP Plc (IAP), Tradeweb Markets LLC, GFI Group Inc. and Bloomberg News parent Bloomberg LP, according to the CFTC website………………………………………..Full Article: Source

U.S. swaps regulator seeks bank openness on commodities

Posted on 16 September 2013 by VRS  |  Email |Print

Regulators should have better insight into the commodity businesses owned by large Wall Street banks to help them prevent market manipulation, a senior official at the U.S. derivatives watchdog said.
The Federal Reserve is reviewing an exception that has allowed banks to trade physical commodities and even own metals warehouses and oil tankers despite a law that prohibits the mingling of finance and commerce. But Bart Chilton, a member of the Commodity Futures Trading Commission which regulates swaps and futures, said his agency did not even know exactly what the banks owned………………………………………..Full Article: Source

Speculators buy up precious, base metals futures, options - CFTC

Posted on 27 August 2013 by VRS  |  Email |Print

Speculators returned as buyers in all precious and base metals futures and options traded on the Comex division of the New York Mercantile Exchange and the Nymex, according to U.S. government data, spurred in part by a rise in prices.
For the week ended Aug. 20, speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report added to their gold and silver net-long positions for the third week in a row, while funds continue to amass bullish positions in platinum group metals. Speculators added to the newly established copper net-long position in the disaggregated report and are now nearly flat in the legacy report………………………………………..Full Article: Source

Oil futures liquidity could take hit from JP Morgan divestiture

Posted on 30 July 2013 by VRS  |  Email |Print

Friday’s news that JP Morgan Chase is considering either selling or spinning off its physical commodities trading business had a negligible effect on oil futures on Monday, but market experts argue that it could hamper liquidity going forward. Dennis Gartman, publisher and editor of the Gartman Letter, theorized that JP Morgan was being “pressured” to leave the physical commodity trading business.
“It’s sad that they are forced out by our government or forced out by public opinion,” Gartman said, adding that any reduction in the physical activity in the marketplace would reduce liquidity and lead to greater volatility as it relates to the oil futures market…………………………………Full Article: Source

Tax hurts India’s commodity derivatives trading

Posted on 10 July 2013 by VRS  |  Email |Print

India’s trading volumes of gold, silver and metal derivatives have fallen by more than a third since the imposition of a commodity transaction tax a week back, exchange data showed on Tuesday.
The finance ministry imposed a 0.01% tax on the trading of all non-agriculture and some agriculture commodity derivatives on July 1 to boost revenues, government officials have said. Stock investors are already paying a similar tax, they said. Commodity exchange officials say the tax has added costs and reduced the incentive for participants to hedge their price risks through trading in derivatives………………………………………..Full Article: Source

3 ways to invest in the best commodity of 2013

Posted on 09 July 2013 by VRS  |  Email |Print

It’s been hog heaven for commodity traders who have pigged out on pork – the best commodity of 2013. Indeed, the $12 billion hog-futures market has gained 19% year-to-date, making it the biggest gainer among commodities in the Dow Jones Commodity Index, which fell 9.9% in the period.
Robust consumer demand, tight supplies and favorable prices compared to beef – which hit record retail prices this spring – were behind pork’s healthy gains………………………………………..Full Article: Source

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