Weaker metals prices overall spurred speculators to shed some of their bullish precious metals futures and options positions at the Comex division of the New York Mercantile Exchange, according to U.S. government data.
For the week ended May 7, speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report saw their net-long positions in precious metals drop across the board in disaggregated report. In the legacy report, action was similar, although silver saw a mild gain in the net-long position. Speculators decreased their net-short position in copper in both reports as prices for the red metal rose………………………………………..Full Article: Source

Futures regulators are close to an agreement that would end a months-long standoff over a central plank of the 2010 Dodd-Frank law and finally bring more transparency to the trading of swaps, the complex financial contracts at the heart of the financial crisis.
The deal would represent a win for Wall Street’s biggest swaps dealers and a big compromise for Commodity Futures Trading Commission Chairman Gary Gensler, who has been at loggerheads with a fellow Democratic commissioner over one part of the rule………………………………….Full Article: Source

Change in regulation causes UK asset management firm to shut its doors to Ucits investors. UK-based global macro manager Cantab Capital Partners is set to close its $320 million commodities trading strategy due to concerns over the impact of new investment restrictions.
The Cambridge-based company intends to formally shut the CCP Quantitative UCITS Fund on June 30 2013………………………………………..Full Article: Source

Futures contracts in most metals traded on the London Metals Exchange spiked on Friday, rebounding from falls earlier in the week following worries over Chinese growth. Copper futures smashed through an 18-month low on Tuesday, trading below $7,000 a tonne.
Manufacturing activity in China had dipped, prompting concerns that the major driver of global growth was about to stall. Indeed, China is responsible for 40pc of global refined copper demand, so any slowdown will hit demand for the metal particularly hard………………………………………..Full Article: Source

The growth of commodity futures markets in India has helped farmers in dismantling powerful trading cartels in commodities like potato and mentha oil apart from helping them in taking more broad-based decision on production, storage and marketing of farm produce, a study conducted by Tata Institute of Social Sciences in association with MCX showed.
The study which analyzed the contribution of commodity exchange ecosystem on economic development showed that commodity futures exchanges have facilitated a number of brokers, traders and producers, who are first generation economic beneficiaries of commodity markets and they have expanded their business with growing opportunities………………………………………..Full Article: Source

In the fast-changing world of securities exchanges, Hong Kong Exchanges and Clearing sits in an enviable position. The Hong Kong Stock Exchange, which it operates, is the worlds fifth largest by the market capitalization of its listed companies, $2.83 trillion, and one of the most profitable.
Over the past five years, it has had a greater volume of initial public offerings, $141.7 billion, than any other exchange in the world thanks to its status as the premier gateway to corporate China. At home it enjoys a statutory monopoly that protects it from upstart electronic exchanges, which have bedeviled established bourses elsewhere………………………………………..Full Article: Source

If you are a holder of one of the many futures-based commodity broad-basket mutual funds or exchange-traded products like (DBC), (GSG), (DJP) or (GCC), then an understanding of what drives the return on the futures contracts held in these products is critically important.
In connection with this, one needs to understand just how different the return on a commodity future can be from a spot commodity. I say this because I think some of the motivations for investors to have commodities in their portfolios is somewhat compromised by the reality that commodity futures have under-performed spot commodities pretty dramatically over the last 15 years……………………………………….Full Article: Source

Officials in Guangzhou, the provincial capital of Guangdong, unveiled plans late Monday to re-establish a futures exchange in the city by the end of 2015, an announcement which could pave the way for the opening of the Chinese mainland’s fifth such exchange if central planners give their nod.
According to statements made at a press conference that night by the city’s mayor, Chen Jianhua, the plans are aimed at helping local manufacturers shore up their pricing abilities when it comes to purchasing raw materials. As of yet, Chen and other local officials have not commented on the types of contracts or products which the exchange is expected to host………………………………………..Full Article: Source

Commodity futures turnover in India fell for the first time since inception in the fiscal year ended March 31, led by a decline in volume in bullion trade, and suspension of guar futures.
India, the world’s biggest buyer of gold, and second biggest producer of wheat, allowed futures trading in 2003 for local participants, and foreigners, who cannot trade in the space, can participate through stakes in commodity exchanges………………………………………..Full Article: Source

Indian investments in commodity futures fell for the first time during the just-ended fiscal year, as regulatory curbs and stronger returns from equities drove investors away from commodities. The value of commodity futures trade fell 6% to 170.47 trillion rupees ($3.1 trillion) in the year ended March 31, data from market regulator Forward Markets Commission showed.
This is bad news for foreign investors who have bought stakes in local commodity bourses expecting that India would emerge as a thriving center for the derivatives trade, as the country is a leading consumer and producer of commodities………………………………………..Full Article: Source

Gold futures are trading slightly higher in the early part of Wednesday’s Asian despite French bank Societe Generale offering up a dismal outlook for the yellow metal on Tuesday.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery are up 0.03% at USD1,577.05 per troy ounce in Asian trading Wednesday. Bullion settled down 1.51% at USD1,576.65 a troy ounce in U.S. trading on Tuesday………………………………………..Full Article: Source

Perturbed by the possible negative implication of the proposed commodity transaction tax (CTT), the Finance Ministry has asked commodity derivatives market regulator the Forward Markets Commission (FMC) to do a detailed impact analysis of how CTT once implemented will affect commodity derivatives non-agri segment and submit the report to it.
The ministry had asked the FMC to submit the report by March 15. Since, the FMC chairman Ramesh Abhishek returned from abroad on Sunday, the report will now be submitted in a day or two. FMC chairman is also meeting consumer affairs minister where the issue of CTT could come up for discussion, said a source in the know………………………………………..Full Article: Source

They tend to have high volatility as their supply can easily be affected by the weather or news that deals with their extraction or transportation. Traditionally, commodities have been one of the most volatile assets in the financial markets.
Copper: As an input for several key industries, copper is a high demand commodity by the industrialized nations around the world. When major economies like China and Europe begin to experience increased manufacturing capacity, the prices of copper will also rise in tandem. Therefore, look for reports relating to GDP’s growths and Purchasing Managers’ Indexes (PMI) to identify opportunities in this commodity………………………………….Full Article: Source

China should accelerate opening commodities futures to overseas investors and detail regulations allowing domestic firms to trade raw materials contracts on bourses abroad, Shanghai Futures Exchange Chairman Yang Maijun said in proposals to the National People’s Congress.
Government agencies including foreign exchange regulators and the tax bureau should use preparations already under way for crude oil futures trading to prepare similar policies allowing foreign investors to trade base metals, precious metals and natural rubber futures, Yang said………………………………………..Full Article: Source

India’s Rs 170-lakh-crore commodity futures market might end FY13 with its worst ever performance. So far, the daily average volumes on five commodity bourses have fallen by about four per cent, while aggregate annual volume is lower by 5.8 per cent, compared with the 50 per cent growth in the past three years. Total average daily trades, too, are lower by seven per cent against last year’s 70 per cent growth.
Shreekant Javalgekar, managing director and chief executive officer of MCX, said: “International exchanges such as CME and LME have seen a sharp fall in volumes due to lower volatility across commodity baskets. MCX has seen a much lower fall due to our sustained awareness campaign among SMEs and farmers’ cooperatives, etc………………………………………..Full Article: Source

The decade-old commodity futures market is set to end this financial year with it worst-ever performance in terms of growth in volumes and number of trades. Till March 6, this financial year, daily average volumes on five commodity bourses taken together fell 4 per cent while total annual volumes were 5.8 per cent lower compared to the 50 per cent growth in the last three years.
One reason for this could be that commodity prices have been on a decline. The number of trades were lower by 7 per cent against last year’s growth of 70 per cent and little less than average 50 per cent growth in the last three years. This fall in volumes and numbers of trade has happened for the first time since online nationwide commodity exchanges started trading in late 2003-04………………………………………..Full Article: Source

Commodity futures and options were the only derivatives that saw growth in trading volumes last year, the World Federation of Exchanges said, amid what analysts said was a weak U.S. market after the MF Global and Peregrine broking scandals.
The number of commodity derivatives traded across the world rose by around 19 percent for a second straight year in 2012, reaching 3,265 contracts in all from 2,749 in 2011, the Paris-based WEF said in a statement issued on Thursday………………………………………..Full Article: Source

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Commodities were the only asset class that saw a rise in the number of exchange-traded derivatives contracts last year, according to statistics compiled by the World Federation of Exchanges (WFE).
The growth was driven by mainland Chinese exchanges, the group found. Exchange-traded derivatives contracts in commodities rose by 19% last year, WFE said, with exchanges in China seeing a 34% increase and accounting for 41% of the global volumes………………………………………..Full Article: Source

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The gold price is set to flatten in 2013, says new analysis from Bank of America Merrill Lynch, before rising in 2014 on renewed currency weakening by central banks. The giant US bank’s chief gold analyst has cut next year’s price target, however – down by 10% from $2000 per ounce – and cut the 2013 forecast by 7% to an average gold price of $1680.
The gold price averaged $1669 in 2012 according to trade body the London Bullion Market Association………………………………………..Full Article: Source

India’s sixth nationwide commodity futures trading platform, Universal Comm-odity Exchange (UCX), is set to go live in April this year with at least 10 agri and non-agri commodities in its kitty. The exchange has enrolled a little 200 members for trading on its platform, which is awaiting the issuance of a unique trading code by the regulator, Forward Markets Comm-ission (FMC).
“We are in the process of getting a unique trading code for each of our registered members. Once that process gets completed, we would be ready for launch,” said Ketan Sheth, managing director of Commex Technologies, the promoter of UCX………………………………………..Full Article: Source

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 Feb. 5, speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report pushed their net-long positions in the platinum group metals to even higher highs. Funds also bolstered their net-long positions in copper on hopes of a strong economic outlook. There were increases in speculators’ net-long positions in gold and silver, although the gains were relatively modest in silver………………………………………..Full Article: Source

Commodity futures offer a safe, scientific way of hedging price risks, besides opening up another avenue of investment, according to Deepak Sayana, Deputy Manager, NCDEX.
He was speaking here today at a seminar on stakeholders’ awareness and education on agribusiness and commodities organised by the Hindu Business Line in association with NCDEX and Forward Markets Commission. He said the five national commodity exchanges and 21 regional exchanges offere a safe, standardised futures trading opportunity for traders to mitigate price risks………………………………………..Full Article: Source

Historically, futures exchanges have been very effective at preventing the failings of individual traders from hurting others. That is one reason why America’s Dodd-Frank law introduced new rules for over-the-counter (OTC) swaps designed to make them more like futures. (“Swap” is a broad term for many types of financial derivatives directly agreed between two parties, including credit default swaps and currency forwards.
The most common is the interest rate swap, which allows people to transform floating-rate debt into fixed-rate debt and vice versa.) In particular, policymakers want greater transparency and central counterparty clearing……………………………………..Full Article: Source

Wall Street banks and Chicago commodity traders on Thursday will each try to sway the top U.S. derivatives regulator their way at a public hearing on whether new rules unduly favor one of the two rivals.
The Commodity Futures Trading Commission (CFTC) is drawing up rules for swaps, speculative financial instruments that were unregulated at the time of the 2007-09 financial crisis, and were widely blamed for exacerbating it………………………………………..Full Article: Source

The beauty of a pendulum is that once set in motion it can swing predictably forever. The difficulty is getting it to return to the middle. This seems to be the problem with regulation of derivatives.
In the 1990s, derivatives were widely heralded as new instruments that could improve the transference of risk. In 1999, then Federal Reserve Chairman Alan Greenspan stated: “By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives.” He went on to argue that they “enhance the ability to differentiate risk and allocate it to those investors most able and willing to take it………………………………………..Full Article: Source

The European Parliament may demand a rethink of new rules designed to make derivatives markets safer in the wake of the financial crisis, potentially leading to months of uncertainty for banks that are big users of these products.
Members of the Parliament are discussing a resolution which, if approved next month, would trigger a formal review of the rules, two sources from the European Parliament said………………………………………..Full Article: Source

A conflict over potentially valuable derivative trading data heated up on Wednesday, underlining how an overhaul of Wall Street after the financial crisis is sparking acerbic competition battles.
The Depository Trust & Clearing Corporation (DTCC), which performs back-office functions for investment banks, threatened to sue the top U.S. derivatives regulator over how rival CME Group Inc (CME.O) plans to handle the data………………………………………..Full Article: Source

In a move that could see a gradual shift of the onshore currency market to offshore, two leading global exchanges — Intercontinental Exchange (ICE) and CME Group — will launch foreign exchange futures contracts on the Indian rupee on January 22 and 28, respectively.
Already, an over-the-counter (OTC) USD-INR non-deliverable forward (NDF) offshore market for trading in currencies that have no full convertibility, such as the Indian rupee, is in existence, but experts reckon that the launch of standard rupee futures contracts on the two American exchanges will lure foreign investors, who are now prohibited from participating in the Indian OTC and exchange-traded markets………………………………………..Full Article: Source

Chicago agricultural commodity futures post a mixed performance Thursday, with corn and wheat futures down while soybeans up, as the net weekly export data dominated the trading on the day.
The most active corn contract for March delivery fell 5.25 cents, or 0.72 percent, to close at 7.2025 dollars per bushel. March wheat edged down 3.5 cents, or 0.43 percent, to settle at 8. 085 dollars per bushel. January soybeans rose 3 cents, or 0.2 percent, to close at 14.765 dollars per bushel………………………………………..Full Article: Source

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The wholesale market gold price traded just above $1,700 an ounce during Wednesday morning in London, having risen back above that level in the earlier Asian session, though they remained near one-month lows.
Silver hovered just above $33 an ounce this morning, down 1.3% on the week, while stocks and commodities edged higher. US and German government bond prices gained, while longer-dated UK gilts fell ahead of the chancellor’s Autumn Statement in London, at which he will unveil the latest UK economic projections………………………………………..Full Article: Source

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Derivatives regulators from major trading centres promised on Tuesday to minimise cross-border clashes over their new rules to rein in risks in the $640 trillion sector and give industry extra time to adjust.
World leaders agreed in 2009 to increase transparency by requiring swaps contracts to be recorded, cleared and traded on electronic platforms by the end of this month, but not all countries are ready………………………………………..Full Article: Source

The world’s first glass futures landed in Zhengzhou Commodity Exchange on Dec.3. The benchmark price of the first glass futures was 1420 yuan per ton. The contract prices tumbled as soon as the market opened, with the price of major contract 1305 falling 7.18 percent to 1319 yuan per ton.
The trading volume of all contract types varying in nine months totaled 720 thousand hands, among which the trading volume of major contract 1305 was nearly 700 thousand hands, accounting for 97 percent. The positions held were nearly 80 hands. All these mark an unusual trading condition of a new type of futures in the domestic market………………………………………..Full Article: Source

‘Hedging’ is a scientific tool for price risk management and helps in reassuring both sellers and buyers of the profit margins but not the speculative profits, said G. Chandrashekhar of The Hindu Business Line.
Chandrashekhar portrayed the fast-changing economic scenario, explicitly indicating a bright future for food market and how national economies were gradually integrating with global market, necessitating the stakeholders to develop a global perspective about the dynamics of international market……………………………………….Full Article: Source

The Gold Price dipped back below $1750 per ounce Tuesday morning, though it remained near to last week’s close, as stock markets recovered losses following news of a deal on Greece’s debt burden. “We continue to be bullish so long as gold holds above the $1705 low from mid-November,” says the latest technical analysis from Scotia Mocatta.
Over in New York, the difference between bullish and bearish contracts held by Comex gold futures and options traders, the so-called speculative net long, rose for the second week running in the week ended last Tuesday, data published last night by the Commodity Futures Trading Commission show………………………………………..Full Article: Source

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Volume growth in derivatives and commodities trading and clearing hit a record high last month, but the securities market activity declined, said the Singapore Exchange (SGX).
According to its monthly report, the turnover for securities fell 6 per cent year-on-year to S$26 billion last month, while daily average value (SDAV) fell 14 per cent to S$1.2 billion. Month-on-month, turnover fell 8 per cent from September, while SDAV was down 16 per cent………………………………………..Full Article: Source

The turnover of China’s futures market hit 134.74 trillion yuan ($21.39 trillion) during the first 10 months of 2012, a year-on-year increase of 18.84 percent, latest data has indicated.
More than 1.15 billion transactions took place on the country’s futures market in the January-October period, up 32.51 percent from the previous year’s equivalent period, according to a China Futures Association statement issued on Saturday………………………………………..Full Article: Source

Increasing capital requirements and other regulatory constraints are cutting the headcount and risk-taking ability of banks in commodity and energy derivatives. Might this diminished role pave the way for less regulated participants to take their place?
Investment bankers admit they are unlikely objects of sympathy. Since the financial crisis, bankers have been subject to an overwhelming degree of popular criticism, possibly only approaching the level of hatred afforded to arms manufacturers, large pharmaceutical companies and the tobacco industry. In response to the critical public mood, politicians have set in train a variety of regulatory reforms that will make it harder for banks to compete in commodity and energy derivatives………………………………………..Full Article: Source

Commodity derivative speculators may face tougher curbs under compromise plans to overhaul the European Union’s financial market rules.
Governments may seek to restrict the number of commodity- derivative contracts that traders can enter into, according to a draft version of the rules prepared by Cyprus, which holds the rotating presidency of the EU. Such a requirement would go beyond a draft law published last year by Michel Barnier, the EU’s financial services chief………………………………………..Full Article: Source

Investors will get a new sense of how Canadian miners are dealing with the wobbly commodities cycle this week when some key producers start to report quarterly results.
Companies due to report are Teck Resources Ltd., the country’s largest diversified miner; No. 1 fertilizer maker Potash Corp. of Saskatchewan Inc.; Goldcorp Inc., one of the world’s largest gold miners; and mid-tier gold miner Agnico-Eagle Mines Ltd………………………………………..Full Article: Source

The Forward Markets Commission (FMC), the commodity derivatives market regulator, is planning to soon allow market-making in illiquid commodities, to enhance depth in the futures market and provide equal opportunity for producers of all commodities.
Talking on the sidelines of FMC’s advisory committee meeting on Tuesday, Ramesh Abhishek, chairman, said, “Mem-bers were of the view that market-making should be allowed in illiquid commodities to enhance depth in the commodity futures market. We would take our view soon.”……………………………………….Full Article: Source

Funds increased their net bullish positions in precious metals futures and options contracts traded on Comex division of the New York Mercantile Exchange and the Nymex, making it eight straight weeks of gains for gold and platinum group metals, according to U.S. government data released Friday.
For the week ended Oct. 9, speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report bumped up their net-long positions precious metals in both the legacy and disaggregated reports. Activity for copper was mixed………………………………………..Full Article: Source

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Hong Kong Exchanges and Clearing Ltd.’s deal to buy the London Metal Exchange will lead to new commodity offerings and provide the best opportunity for exposure to Chinese growth and liberalization, Hong Kong Exchanges’ Chief Executive Charles Li said Monday.
The London Metal Exchange is primarily a marketplace for base metals such as copper and aluminum. The Hong Kong Exchanges group, or HKEx, is one of the world’s largest exchange owners by market capitalization……………………………………….Full Article: Source

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Two of the world’s top commodity exchange powerhouses are scrambling to turn new regulations to their advantage in an important but largely hidden piece of their business, the trading and clearing of energy swaps.
Chicago-based giant CME Group Inc. has lost ground in the estimated 747.8 million pounds-a-year business of guaranteeing over-the-counter swaps to arch-rival IntercontinentalExchange Inc. in recent years, company data show, as the Atlanta-based upstart offered cutting-edge trade technology………………………………………..Full Article: Source

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The U.S. Commodity Futures Trading Commission may delay a rule set to take effect on Friday that would impact cleared energy swaps, according to a report by Bloomberg on Thursday.
New rules that were mandated by the 2010 Dodd-Frank financial oversight law require firms that have $8 billion or more in annual swap dealing activity to register with regulators as swap dealers, bringing them under additional scrutiny………………………………………..Full Article: Source

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Singapore may not have a carbon tax regime yet but being a financial hub, it may be poised to be a centre for water and carbon trading. This is according to the inventor of carbon trading, Dr Richard Sandor, who was speaking at a Singapore Exchange (SGX) lecture.
Governments around the world are attempting to cut carbon emissions and reduce the effects of global warming. Regional countries are reassessing their entire energy policy to be in line with global demands to cut carbon emissions………………………………………..Full Article: Source

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Two Chinese fund houses have launched funds focused on the domestic commodities futures market as they look to tap into the burgeoning market that regulators have cautiously opened to local financial institutions this year.
More than a dozen Chinese futures brokerages, which until recently were barred from investing directly into the futures market, have also applied to set up funds that trade commodity futures through a managed account product………………………………………..Full Article: Source

Commodity derivatives are useful tools for hedging against risk in emerging economies whose revenues mainly come from exports of mono products. Commodity markets are generally held to comprise oil and gas, gold, silver, platinum and palladium, copper nickel, aluminum, zinc and tin, as well as agricultural products which include grain, sugar, coffee, cocoa.
Each of these products can potentially use derivative instruments for risk management purposes, but it is the energy and metals markets that are at present the most well developed with parallels with most financial derivatives products………………………………………..Full Article: Source

Under English law, it is generally accepted that a contract is frustrated when without default of either party, a contractual obligation, which is or becomes significant, becomes incapable of being performed because the circumstances in which the performance is called for renders it radically different from that envisaged by the parties at the time of contracting.
Where a contact is frustrated, the law declares both parties to be discharged from further performance and brings the contract to an end immediately………………………………………..Full Article: Source

It may sound surprising to some people, but it’s true that banks are not allowed to trade in commodities in India. The banks are allowed to trade in financial instruments (such as shares, bonds and currencies) in securities market but the Banking Regulation Act of 1949 strictly prohibits banks (both domestic and foreign) from trading in goods and therefore they are not allowed to trade in commodity futures market.
The Section 8 of Banking Regulation Act clearly states that no bank shall “directly or indirectly deal in the buying or selling or bartering of goods, except in connection with the realisation of security given to or held by it.”……………………………………….Full Article: Source

The Commodity Futures Trading Commission (CFTC) today approved final rules to improve the risk management procedures of swap dealers and major swap participants. As Opalesque has previously reported, once the rules go into effect, they will trigger additional provisions already outlined through the Dodd-Frank Act.
The Dodd-Frank Wall Street Reform and Consumer Protection Act directed the Commission to adopt rules on the timely and accurate confirmation, processing, netting, documentation, and valuation of all swaps, as well as the reconciliation and compression of swap portfolios. These rules fulfill this congressional direction. Many of these final rules establish the product definitions that will set the scope for how swaps markets activities and swaps dealers will be supervised through both the CFTC and the Securities and Exchange Commission (SEC)………………………………………..Full Article: Source