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Commodities Briefing - Category | Futures and Options more

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

Wheat slump longest since 2005 on global output

Posted on 02 July 2013 by VRS  |  Email |Print

Wheat futures slid to a one-year low, extending the longest slump since 2005, on signs of record global output and reduced demand for supplies from the U.S., the world’s biggest exporter.
Farmers from Australia to Canada will produce a combined 683.1 million metric tons in the year that starts today, up 4.3 percent from the prior 12 months and the highest ever, the International Grains Council said today. Prices have tumbled 16 percent this year as importers shun U.S. supplies for cheaper grain from Russia and Ukraine, and signs of a record Midwest corn harvest in 2013 erodes demand for wheat in livestock feed………………………………..Full Article: Source

Copper: The bullish U turn

Posted on 26 June 2013 by VRS  |  Email |Print

Copper futures seem to have come a full circle or has taken an abrupt U-turn, as analysts say. The commodity was in an extreme bearish territory in the morning as China credit crunch situation loomed large on markets.
The soothing words from Peoples Bank of China’s deputy director of the Shanghai branch that China would maintain money market rates at reasonable levels even as the seasonal forces that drove the rates up would fade. The liquidity risks that the system faced was controllable and the PBOC would closely monitor rates………………………………………..Full Article: Source

Chicago agricultural commodity futures trading goes up across board

Posted on 20 June 2013 by VRS  |  Email |Print

Trading of Chicago agricultural commodity futures soared across the board Wednesday, with three major agricultural commodities all registering double-digit gains.
The most active corn contract for December delivery gained 20 cents, or 3.63 percent, to close at 5.705 dollars per bushel. July wheat rose 19.5 cents, or 2.84 percent, to settle at 7.07 dollars per bushel. November soybeans climbed 21 cents, or 1.63 percent, to close at 13.1075 dollars per bushel………………………………………..Full Article: Source

Commodity derivatives regulation gathers pace outside EU and US

Posted on 14 June 2013 by VRS  |  Email |Print

Although much of the recent focus has been on rules in the European Union and the US, other jurisdictions across the globe are also weighing changes to the way they regulate over-the-counter commodity derivatives. In some cases, these could have significant implications for market participants.
Over-the-counter commodity derivatives represent a tiny part of a big jigsaw puzzle. By the end of 2012, the size of the OTC commodity derivatives market stood at $2.6 trillion in notional value, according to the Basel-based Bank for International Settlements, while the wider OTC derivatives market represented a staggering $633 trillion………………………………………..Full Article: Source

Speculators lift bullish positions in precious metals futures, options — CFTC

Posted on 11 June 2013 by VRS  |  Email |Print

Speculators returned to bolster their net-long positions in all precious metals futures and options traded on the Comex division of the New York Mercantile Exchange and the Nymex, according to U.S. government data.
For the week ended June 4, a mix of short covering and new buying lifted speculators’ net-long positions in the Commodity Futures Trading Commission’s weekly commitment of traders report, following mixed activity in the previous report. Funds also whittled down their net-short position in copper………………………………………..Full Article: Source

Speculators cut most bullish precious metals futures, options positioning — CFTC

Posted on 14 May 2013 by VRS  |  Email |Print

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

Regulators near a deal on platform for swaps

Posted on 10 May 2013 by VRS  |  Email |Print

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

Commodities crackdown forces CTA closure

Posted on 09 May 2013 by VRS  |  Email |Print

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

Copper loses its sheen as over-supply puts market bears in driving seat

Posted on 29 April 2013 by VRS  |  Email |Print

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

Commodity futures market helped farmers: Study

Posted on 29 April 2013 by VRS  |  Email |Print

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

Hong Kong’s exchange is betting its future on commodities and the renminbi

Posted on 22 April 2013 by VRS  |  Email |Print

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

Understanding futures-based commodity fund returns

Posted on 10 April 2013 by VRS  |  Email |Print

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

Guangzhou plans to relaunch futures

Posted on 10 April 2013 by VRS  |  Email |Print

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

India: FY13 commodity turnover falls for first time since inception

Posted on 09 April 2013 by VRS  |  Email |Print

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

India commodity futures trade value falls

Posted on 09 April 2013 by VRS  |  Email |Print

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 inches higher despite Soc Gen price forecast

Posted on 03 April 2013 by VRS  |  Email |Print

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

India: FM seeks CTT impact analysis from FMC

Posted on 19 March 2013 by VRS  |  Email |Print

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

How to trade commodities with binary options

Posted on 15 March 2013 by VRS  |  Email |Print

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

SHFE calls for opening commodities futures to overseas traders

Posted on 12 March 2013 by VRS  |  Email |Print

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: Commodity derivative volumes shrink for first time; gold leads fall

Posted on 11 March 2013 by VRS  |  Email |Print

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

What commodity markets need

Posted on 11 March 2013 by VRS  |  Email |Print

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

Commodities saw more growth than other derivatives in 2012 -WEF

Posted on 08 March 2013 by VRS  |  Email |Print

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 derivatives growth driven by China, WFE says

Posted on 08 March 2013 by VRS  |  Email |Print

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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Bullish gold analyst cuts 2014 price forecast

Posted on 06 March 2013 by VRS  |  Email |Print

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

UCX to commence trading in April

Posted on 06 March 2013 by VRS  |  Email |Print

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 buy up precious, base metals futures, options — CFTC

Posted on 12 February 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 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

India: Commodity futures needed to hedge price risks

Posted on 06 February 2013 by VRS  |  Email |Print

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

Derivatives markets regulation: Back to the futures?

Posted on 05 February 2013 by VRS  |  Email |Print

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 vs. commodity traders at U.S. watchdog swaps hearing

Posted on 01 February 2013 by VRS  |  Email |Print

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

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