Chinese authorities keep a tight grip on the country’s commodity exchanges as part of efforts to deter speculators from driving up food and resource prices.
The three commodity futures exchanges, in Shanghai, Dalian and Zhengzhou have only a small window to foreign participation. Financial institutions are barred from participating, and brokers cannot take positions………………………………………..Full Article: Source

The NYSE Liffe, Europe’s largest agricultural commodity exchange, is seeking to limit the position a market participant can hold at the point of delivery of the contract.
The move is part of a proposed regime for monitoring London’s commodity contracts at a time when the global industry is under political pressure to regulate markets………………………………………..Full Article: Source

There is finally a future in the futures market. If 2008 left a deep imprint on the crisis calendar and 2011 went down as a slow haemorrhage, the new year blinks in more optimism and choice for Chinese investors.
As the biggest consumer of various commodities, China has renewed its efforts to strengthen its pricing power and sway commodity prices in the international market. Its tightly regulated futures exchanges, which allow very limited access to foreign firms, have not yet developed muscles to match China’s massive demand and buying volume………………………………………..Full Article: Source

The Commodity Futures Trading Commission approved a rule on Thursday designed to shed more light on trading in the futures and swaps markets, the agency’s latest effort to protect customers following the collapse of MF Global last October.
The rule, which was approved 4-1 in private by the CFTC’s five commissioners, would require investment companies such as mutual funds that invest in commodities to register with the CFTC. It reinstates measures in place prior to 2003………………………………………..Full Article: Source

To increase the penetration of savings instruments and upgrade financial literacy in rural areas, industry body Assocham on Thursday called for permitting banks as intermediaries in commodities futures market so that economic benefits of development spread beyond urban pockets.
Though the country has a high savings rate, the participation of urban population with high incomes in agricultural segment is minimal due to lack of suitable investment opportunities and absence of credible intermediaries dealing with agri-based investment products………………………………………..Full Article: Source

A pioneer in the multitrillion-dollar credit-derivatives market is seeking approval for what could be the first exchange catering to privately traded derivatives, or “swaps,” instruments that currently trade off-exchange.

Sunil Hirani, who in 1999 co-founded Creditex Group, an electronic execution platform for credit-default swaps, has asked the Commodity Futures Trading Commission to approve the new venture, trueEX, as an exchange or “designated contract market” for swaps, according to documents made public on the CFTC website Jan. 31. Mr. Hirani and other staffers at trueEX also met with CFTC member Scott O’Malia on Feb. 1, CFTC records show……………………………………….Full Article: Source

2012 may have started off like a bull, but it appears that the bears are lurking in the shadows, waiting to make their move. This week has already seen a disappointing halt to the surge that general markets had enjoyed to start the new year, as drama from overseas as well as lackluster earnings have put a damper on investor confidence.
But commodity investors can take advantage of this lull with a number of different products that have been profiting from these turbulent markets; namely precious metals. These elusive investments have been outperforming most assets in the trailing week, leaving many investors chomping at the bit for juicy returns………………………………………..Full Article: Source

European lawmakers and diplomats clashed on Tuesday over new rules to overhaul the $700 trillion derivatives market, threatening to delay one of the centrepieces of European financial reform.
The dispute centres on how much power should be given to an EU agency to oversee derivatives, one of the most opaque areas of finance, and once described as “financial weapons of mass destruction” by billionaire investor Warren Buffett………………………………………..Full Article: Source

With almost an entire month in the books, 2012 is shaping up to be a strong year for commodities, as a number of these investments have produced handsome gains. Futures for gold, cocoa, and silver have garnered a fair amount of attention, delivering eye popping gains in a relatively short period of time.
But for those looking for a truly hot commodity, no product has been able to outdo orange juice. While these futures are certainly more obscure than something like gold or oil, their gains for the year are impossible to ignore ……………………………………….Full Article: Source

The European Union came a step closer to overhauling regulations for the $700 trillion (448.60 trillion pound) derivatives market on Tuesday, one of the most opaque sectors in finance.
The EU rules, which could be in place by the end of the year, will overhaul a market that boomed in the run-up to the financial crash, demanding deals done off an exchange pass through a clearing house that pools emergency back-up capital………………………………………..Full Article: Source

The euro strengthened and commodities rallied as a person familiar with the discussion said the International Monetary Fund is proposing raise its lending resources by $500 billion. U.S. index futures rose before Goldman Sachs Group Inc. reports earnings.
The euro appreciated 0.6 percent to $1.2818 at 6:38 a.m. in New York. Oil rose 0.8 percent to $101.50 a barrel and the S&P GSCI index of 24 commodities gained for a second day. Standard & Poor’s 500 Index futures added 0.4 percent………………………………………..Full Article: Source

The commodity futures market regulator, Forward Markets Commission (FMC) is once again reported to be lobbying the Finance Ministry for allowing commercial banks to enter commodity derivatives market for the ostensible reason that the banks have exposure to commodities and need to hedge the price risks.
Import of gold and crop loans to farmers are cited as examples of banks’ commodity-based transactions and exposure. Currently, banks are not allowed to trade commodities………………………………………..Full Article: Source

Big derivatives market-makers invariably have complementary strengths in the underlying asset class – big interest rate swap players also underwrite debt and trade bonds, for example.
The same principle applies to commodity derivatives, but is much harder to put into practice – commodities finance and trading requires the ability to store and transport huge volumes of physical assets………………………………………..Full Article: Source

A doubling of commodity broking incomes, partly due to the shifting of retail clientele from equities markets to gold and silver futures traded on commodity exchanges, has to some extent stemmed the rot on the P&L accounts of brokerages which are reeling from reduced retail participation on the equity markets.
In a few cases, the commodity broking business has begun to contribute half of overall broking revenues. Commodity broking turnover, said the head of an equities brokerage, traditionally contributed around 5-10% to a brokerage’s overall turnover………………………………………..Full Article: Source

The past few months have been tough for those holding precious metals stocks, PM futures contracts or physical bullion. With silver trading down 41%, precious metals stocks down 30% and gold 15%. It has people scratching their head.
The question everyone keeps asking is when can I buy gold and silver? Unfortunately there is not a simple answer. With what is unfolding across the pond and the bullish outlook for the US Dollar index the next move is a coin toss………………………………………..Full Article: Source

Speculation, though an integral part of commodity derivative trading, needs to be kept within limits and increasing participation of hedgers would automatically ensure that, said Forward Markets Commission Chairman Mr Ramesh Abhishek.
When the proportion of hedgers in a contract increases sharp speculative swings can be kept within limits. “We have asked exchanges to promote hedging tools available with them to bring in more hedgers on as participants,” Abhishek said………………………………………..Full Article: Source

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India’s central bank curbed trading in rupee forwards, seeking to temper speculation after Asia’s worst-performing currency fell to a record low.
Forward contracts once canceled cannot be bought again, the Reserve Bank of India said in a statement on its website yesterday. The new rule applies to domestic as well as foreign investors and takes effect immediately. Forwards are agreements to buy or sell assets at a set price and date………………………………………..Full Article: Source

The London Metal Exchange plans to introduce exchange-traded financially settled swaps for all non-ferrous metals contracts on Jan. 23, exchange officials said Tuesday. The average-price contracts will be the world’s first of their type traded on-exchange.
The contracts have been designed for participants of the physical industry needing to hedge the monthly average price, officials said. “LME swaps will bring transparency to pre- and post-trade prices,” Chris Evans, head of business development at the LME, said in a statement………………………………………..Full Article: Source

By far the most important event of the past week was the joint announcement by the world’s leading central banks that they were extending existing US dollar swap agreements and lowering the swap rate. Furthermore, these dollar swaps will be extended to secondary swaps between individual central banks in non-dollar currencies as required.
The stated purpose of this action, according to the Bank of England, is to ease strains in financial markets to ensure credit continues to be available to households and businesses, and so foster economic activity………………………………………..Full Article: Source

The proposal for stamp duty exemption for trading in commodity derivatives has suddenly found many supporters. The Forward Markets Commission (FMC), under the ministry of consumer affairs (MCA), has strongly recommended to the ministry of finance that futures trading in commodities should be exempted from stamp duty completely.
“We have written to the finance ministry to fully exempt commodity futures trading from all types of stamp duty,” said a senior FMC official………………………………………..Full Article: Source

Some of the world’s biggest financial firms are locked in a battle over the control of large banks in the $300 trillion market for privately traded derivatives in the United States. The fight pits dealers such as JPMorgan, Morgan Stanley and Deutsche Bank against much of the rest of the financial industry.
At the heart of the dispute is a set of seemingly obscure rules that, however esoteric, may help decide the winners and losers in the industry, an opaque market blamed as a major contributor to the 2008 financial crisis………………………………………..Full Article: Source

The value of privately traded derivatives in force globally rose 18% during the first half, reaching $708 trillion by the end of June, according to figures released yesterday by the Bank for International Settlements.
This marks the fourth biggest six month increase on record, and it comes as the over the counter derivatives market is facing a regulatory overhaul that will change the way trades are executed and processed……………………………………..Full Article: Source

The world’s biggest metal market, the London Metal Exchange (LME) which accounts for 80 per cent of traded volume in global metal futures transactions, saw record trading volumes last year of 120 million lots equivalent to $11.6 trillion and 2.8 billion tonnes of metal. Pre-tax profit in 2010, limited by the low fees, fell 28 per cent to 12.5 million pounds.
CME Group, the largest futures exchange in the United States, has in recent months appeared to distance itself from a takeover, and a spokesman said on Friday it did not comment on rumours………………………………………..Full Article: Source

Commodities market has been fluctuating on the back of the uncertainty over Greek bailout. Most commodities dropped earlier on speculation that Greek referendum would derail the country’s bailout plan and worsen the European debt crisis.
They recovered in the course of the week after the Greek PM scrapped the planned referendum. Interest rate cut by European Central Bank pushed up prices of gold futures and crude oil futures rose to three-month high. However, base metals have remained weak over the week………………………………………..Full Article: Source

The Commodities Futures Trading Commission (CFTC) voted to approve controversial measures designed to rein in commodity speculation. The new rules, part of last year’s financial-reform law in the US, will limit the positions that traders can take in commodity futures and swaps.
The rules apply to 28 commodities, including wheat, gold and oil. For commodities that are about to be delivered, the limit was set to 25% of deliverable supply; for contracts with a later delivery date the limit will be 10% of open interest……………………………………….Full Article: Source

The Markets in Financial Instruments Directive – better known as Mifid – does not have the snappiest of names but it does have bite. In the next 24 hours, Brussels is expected to use the directive to curb the appetite of commodity speculators and restrict the “high frequency trading” that was blamed for the 2010 “flash crash” on Wall Street.
City minister Mark Hoban has already made clear that the UK will not tolerate protectionist measures from Brussels. Elements of Mifid, though, could be welcomed in some quarters……………………………………….Full Article: Source

The European Union is pushing for position limits on commodity derivatives and for restrictions on high-frequency trading. The regulations are included in proposals from the EU’s executive arm, the European Commission, that are expected to be released later this week.
The proposals include limits on the number of commodity derivative contracts market members can enter into, Bloomberg News reported late Friday, citing copies of the proposals the news service said it had obtained……………………………………….Full Article: Source

Makes case for standardising inspection norms with increased thrust on checking malpractices. Commodity futures market regulator, the Forward Markets Commission (FMC), is taking several initiatives to improve functioning of the market, protecting investors interests and ensuring greater degree of compliance by commodity brokers.
It has also made a case for standardising inspection norms with increased thrust on checking malpractices……………………………………….Full Article: Source

Speculators cut bets on rising commodities prices by the most in 19 months as raw materials tip into their first bear market since 2008 and investors anticipate more losses.
Money managers cut the combined net-long position across 18 futures and options by 20 percent in the week ended Sept. 20, the most since February 2010, data from the U.S. Commodity Futures Trading Commission show. The Standard & Poor’s GSCI commodity gauge ended last week down 21 percent from the almost three-year high in April, the common definition of a bear market……………………………………….Full Article: Source

Cocoa, sugar and other commodities dropped as investors took refuge in the U.S. dollar on an increasingly bleak economic picture.
After the markets closed Wednesday, the Federal Reserve announced a program to drag the U.S. economy back from the brink of recession, saying it will boost its share of longer-term Treasurys by $400 billion by June 2012 by selling shorter-dated holdings—a program dubbed “Operation Twist” after a similar scheme used in 1961……………………………………….Full Article: Source

The U.S. futures regulator has yielded on several contentious parts of a plan to crack down on commodity speculation, marking a modest victory for banks and traders who have lobbied to limit increased market oversight.
A draft of the final rule by the Commodity Futures Trading Commission, reviewed by Reuters late on Wednesday, maintains that the Dodd-Frank Wall Street overhaul law requires position limits — caps on the number of contracts a single trader can hold — to prevent excessive speculation in oil, grain, silver and other commodity markets……………………………………….Full Article: Source

In a speech to European policymakers in June Nicolas Sarkozy, the French president, encouraged his audience to be serious about “fighting the mafia”. He was not referring to a French Tony Soprano, but rather that other breed of criminal: commodity speculators, whom many politicians on either side of the Atlantic blame for dramatically pushing up the price of oil and food and contributing to volatility.
America is leading the charge. As part of a new financial-reform law, the Commodities Futures Trading Commission (CFTC) is proposing “position limits” on the amount of derivative contracts, including futures and swaps, a trader can hold for 28 commodities……………………………………….Full Article: Source

Global regulators may need to tighten their rulebooks for commodity derivatives markets to ensure they operate transparently and free from abuse, the International Organization of Securities Commissions said.

IOSCO recommended supervisors use position limits, publication of open contracts and reporting of over-the-counter derivatives to tame commodity markets that operate in “disorderly conditions,” according to an e-mailed statement……………………………………….Full Article: Source

August was a tumultuous month for markets across the board. The first ever downgrade of U.S. debts was handed out by S&P while the Fed announced it would be freezing rates for nearly two years.
Markets reacted poorly to the headlines throughout the month, swaying back forth by as much as 5%. Volume went through the roof as traders made a play to profit on volatile markets, while others pulled their assets and headed for higher ground and safer asset classes………………………………………Full Article: Source

Steel trading is migrating to exchanges despite the reluctance of some large steelmakers to participate in the market, as users of the industrial alloy demand a way to protect their bottom lines from volatile prices.
Major commodity exchanges see a lucrative market in waiting, since steel is the most widely traded industrial commodity that lacks a clear futures-market benchmark. But large U.S. and European steelmakers, leery of market speculators and a loss of control over pricing, have been more reluctant to make the jump to futures trading……………………………………….Full Article: Source

Under a new trial program, China will let domestic brokerage firms return to international futures markets for the first time in 17 years, an industry executive said, as Beijing seeks to give its companies more ways to hedge their risks abroad.
China’s securities regulator selected China International Futures Co., the country’s largest futures brokerage by trading volume; Cofco Futures Co.; and Yongan Futures Co. to participate in the trial, said China International Futures Chairman Jiang Xin in an interview……………………………………….Full Article: Source

The Commodity Futures Trading Commission is moving to safeguard dozens of derivatives regulations from legal challenges after a federal appeals court recently struck down a new rule for corporate America, an agency official said Tuesday.
Scott O’Malia, a Republican member of the commission, said his agency was rewriting its so-called position limits rule, among others, to account for the regulation’s economic impact on the financial industry……………………………………….Full Article: Source

The Institute of International Finance urged Group of 20 nations Monday not to impose regulatory constraints on trading in commodity market derivatives, warning they could hurt liquidity and distort markets.
Pushing back against French President Nicolas Sarkozy’s effort to tackle high commodity prices by clamping down on speculation during his leadership of the G-20, the global banking group issued a report finding no “clear causal link between financial investment and commodity prices.”………………………………………Full Article: Source

Regulators, having already missed the main deadline to implement complex rules to rein in the vast derivatives market, are continuing to struggle in their quest to set the rules to prevent a repeat of the 2008 financial crisis.
Commodity Futures Trading Commission Chairman Gary Gensler said in a Thursday meeting that several major new rules for over-the-counter derivatives market won’t be finalized until 2012, including rules on how much cash companies need to set aside to protect against losses on derivatives bets……………………………………….Full Article: Source

The volume of iron ore financial derivatives cleared against The Steel Index (TSI) hit a fresh record of more than 6.6 million tonnes in August, topping $1 billion in a single month for the first time, TSI said on Monday.
The derivatives of the key steelmaking raw material, including swaps and options, have attracted growing interest from industry players to investment banks to trade the commodity in a move to hedge wider risk from the 1-billion-tonne seaborne iron ore market……………………………………….Full Article: Source

The search for the perfect portfolio has long been the goal for investors, as many tinker with the makeup of their underlying holdings in order to maximize returns. While there is no set standard for a portfolio, it is widely agreed that any group of holdings needs to be well-diversified to deliver the most stable returns.
This brings the inclusion of stocks, bonds, real estate, and more recently, commodities……………………………………….Full Article: Source

Hedge funds and large investors increased their bullish bets on agricultural commodities to the highest level since early May as adverse weather continues to erode yield prospects for corn and soybean crops. They raised their net long futures position by 13 percent to 804,000 lots with gains primarily seen in soybeans, wheat and sugar.
Across all sectors they added 69k lots to a new three week high of 1,149k lots with gains in the above commodities only partly offset by reductions in energy, metals and meats……………………………………….Full Article: Source

The CME Group on Wednesday raised margins on gold futures by about 27 percent, the biggest hike in more than two and a half years and the second increase in a month.
The margin increase came as gold futures fell more than $100 on Wednesday in one of the steepest falls ever, as strong U.S. economic data and expectations of more Federal Reserve stimulus accelerated profit taking from the safe-haven’s record high on Tuesday……………………………………….Full Article: Source

Futures in grains, supported by tight corn supplies, are a better bet than soft commodities, of which only cocoa looks set for price rises, Barclays Capital said, in a report forecasting a “bumpy ride” for raw materials.
The outlook for commodity investors “is more challenging than it has been some time”, with volatility set to prove “considerably greater” as the market factors in heightened concerns for the world economy at a time of relatively tight raw material supplies, the investment bank said……………………………………….Full Article: Source

Singapore Mercantile Exchange (SMX), the first pan-Asian multi-product commodity and currency derivatives exchange, today announced that the world’s first Iron Ore Futures Contract on a global platform, settled based on the Metal Bulletin Iron Ore (MBIO) Index will be launched on the 12th August 2011.
Metal Bulletin is the leading independent provider of premium information and pricing for the metals industries. Metal Bulletin’s MBIO index is a good reflection of the seaborne merchant market for sinter fines delivered to China………………………………………Full Article: Source

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Food commodities such as grain, corn and soybeans saw futures prices soar yesterday after the US government said months of bad weather would slash crop yields.
The department of agriculture said droughts in corn-producing areas and heavy rain and floods in other parts of the US would cut crop sizes……………………………………….Full Article: Source

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Quotations for rice futures contracts were established for the first time Tuesday on the Tokyo Grain Exchange, where futures trading for the crop resumed Monday for the first time in 72 years.
The bellwether Koshihikari brand from the Kanto region for delivery in January exchanged hands at ¥17,280 per 60 kg, while the brand’s November and December deliveries traded at ¥17,400 after soaring by the daily limit of ¥1,000 from the reference price of ¥16,400……………………………………….Full Article: Source

Eurex, Deutsche Börse’s derivatives exchange, launched options and futures on two commodity exchange-traded funds last week to increase the profile of its commodity derivatives franchise by tapping the booming global ETF market.
The funds, also known as exchange-traded commodities, will give Eurex clients greater exposure to two of the most liquid commodity markets, gold and crude oil……………………………………….Full Article: Source

While the movement in the stock market in the last two weeks has been considered somewhat extraordinary, a 10 percent move in a commodity in that time frame is not that uncommon.
In fact, in the same two week period several commodities, including Sugar and Crude Oil declined more than 10% as well. To consider the Stock Market anything other than a Commodity or Futures market is a mistake. Commodities are described by Merriam Webster as “a mass-produced unspecialized product”……………………………………….Full Article: Source

Industry body Assocham has urged the government to take steps to curb excessive speculation in futures trading in farm commodities, saying they fuel food inflation.
“An extreme price volatility and price hike in commodities like chana, guargum, guarseed, coriander has been witnessed during May-July,” the Associated Chambers of Commerce and Industry of India (Assocham) said in a statement……………………………………….Full Article: Source