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The other commodity that’s leaping on the Ukraine war

Posted on 21 August 2014 by VRS  |  Email |Print

While international oil prices sit at a one-year low, concerns that Russian geopolitical tensions will drive up energy prices seem to have eased. But fears over the future of the Russia-Ukraine crisis are pushing another commodity to highs not seen in more than a decade.
Palladium futures prices opened the week at nearly $895 per ounce—their highest level since Feb. 22, 2001—on trader fears that exports from Russia could be limited by sanctions, experts tell CNBC. And despite analysts’ observations that those worries are not entirely rational, many are still predicting that the metal, used in catalytic converters, will rise to $1,000………………………………………..Full Article: Source

Low Commodity Prices Could Affect 2014 Equipment Purchases

Posted on 21 August 2014 by VRS  |  Email |Print

With fall right around the corner, farmers are gearing up to harvest one of the largest crops in history. Corn production for 2014/15 is forecast 172 million bushels higher at a record 14 billion bushels. USDA’s first survey-based corn yield forecast, at a record 167.4 bushels per acre, is up 2.1 bushels from last month’s trend-based projection.
In Mid-June, more than 581 farmers across the country took part in AgWeb’s 2014 Equipment and Machinery Research survey. Participants were surveyed on product questions across eight categories, including: tractors combines, sprayers, irrigation, grain storage, implements, tillage and financial sectors………………………………………..Full Article: Source

Tentative signs of stronger Indian gold demand in H2

Posted on 21 August 2014 by VRS  |  Email |Print

Gokulasthami, one of the major festivals celebrated across Maharashtra and some parts of South India, has now got a touch of gold, underscoring what some expect will be stronger second half for gold demand in India as the festival season ramps up.
If anything attracts Indians, it is gold, and gift prizes of gold pots, and gold coins, and even gold plated decorations rouse the masses. The tradition of Dahi Handi festival on Gokulashtami, celebrated across India on August 18 and 19 this year, relates to a human pyramid breaking an earthen pot filled with buttermilk suspended high above the ground, sometimes well over 50 feet above the ground………………………………………..Full Article: Source

Platinum, palladium prices are tanking

Posted on 21 August 2014 by VRS  |  Email |Print

Platinum futures listed on Nymex were trading lower at $1,434.00 an ounce on Wednesday, while September palladium contracts fell sharply to a low of $869.65 an ounce as recent optimism about the prospects for the sector evaporate.
Palladium futures trading on New York’s Nymex hit an all-time record intra-day futures price above $900 an ounce on Monday on supply fears as tensions between the West and Russia over the latter’s involvement in Ukraine escalate………………………………………..Full Article: Source

BHP Billiton plans mining’s biggest spin-off as commodity boom falters

Posted on 20 August 2014 by VRS  |  Email |Print

BHP Billiton Ltd. announced what’s poised to be the biggest spin-off in the mining industry, separating aluminium, coal and silver assets to create a company valued at about $15 billion after it begins trading next year. The new unit will operate in five countries from Australia to South Africa, the Melbourne-based producer said on Tuesday in a statement, while announcing a 10% jump in full-year profit to $13.4 billion.
BHP’s London-listed shares fell the most in 14 months. A decision to skip a widely anticipated share purchase will disappoint investors, who had expected a $3 billion buyback, Citigroup Inc. said………………………………………..Full Article: Source

Rio Tinto’s single-commodity exposure not a bad thing, says Investec

Posted on 20 August 2014 by VRS  |  Email |Print

Rio Tinto’s heavy exposure to iron ore shouldn’t necessarily be seen by the market as a bad thing, according to Investec. The broker has maintained its ‘hold’ rating for the stock, but hiked its target price from 3,220p to 3,552p. Investec analyst Hunter Hillcoat said that the miner’s single-commodity exposure is ‘often portrayed as a weakness’.
However, he said that the iron ore division’s ‘exaggerated operating margins’ means that Rio Tinto has the capacity to withstand high price volatility. Iron ore margins are running at 60-70% this decade, twice that of other commodity classes………………………………………..Full Article: Source

Five Regions Where Big Oil Is Foolishly Chasing Profits

Posted on 20 August 2014 by VRS  |  Email |Print

Big Oil has been very successful at developing sophisticated technology to access oil in some pretty remote areas. Consider the technological skill necessary to drill several miles below the seabed at staggering depths, or the processing equipment needed to transform viscous bitumen into usable fuel – these are impressive feats of engineering and science.
But after years of spending billions of dollars on these challenges, the world’s largest oil companies are running into a serious problem: Many of their projects are not profitable and won’t be anytime soon………………………………………..Full Article: Source

Global gold demand continues to recalibrate in Q2

Posted on 20 August 2014 by VRS  |  Email |Print

The latest World Gold Council Gold Demand Trends report, covering the period April – June 2014, shows that global gold demand continues to demonstrate a return to long-term trends after an exceptional year in 2013. Total global gold demand in Q2 stood at 964 tonnes (t), 16% lower than the same period last year, as consumers and investors pulled back and consolidated their activity.
Global jewellery demand, which represents more than half of total global demand, was unsurprisingly down 30% year-on-year to 510t. In comparison Q2 2014 was 11% higher than Q2 2012, extending the broad upward trend evident since 2009. India and China remain significant drivers of the global jewellery market, purchasing 154t and 143t respectively……………………………………….Full Article: Source

Investors Raise Their Shields Against Russia

Posted on 19 August 2014 by VRS  |  Email |Print

Investors are scrambling to reduce their exposure to the potential economic fallout from continuing fighting in Ukraine, unsettling already-fragile markets. Currencies in Central and Eastern Europe, including the Hungarian forint and Polish zloty, have plunged to at least one-year lows against the dollar as investors pull back from the economies most vulnerable to blowback from sanctions against Russia. European stocks also have sagged.
Investors are responding to escalating violence and tit-for-tat sanctions that are reverberating throughout the region’s financial markets and exposing new vulnerabilities in Europe’s struggling economy………………………………………..Full Article: Source

IEA: Oil demand growth forecast lowered

Posted on 19 August 2014 by VRS  |  Email |Print

The global oil demand growth forecast for 2014 has been curtailed since last month’s report to a more modest 1 million b/d, according to the International Energy Agency’s most recent Oil Market Report.
The revision was primarily due to lower-than-expected second-quarter deliveries and downgraded macroeconomic outlook from the International Monetary Fund (IMF). Demand growth is forecast to accelerate in 2015 to 1.3 million b/d as the economy improves. Global oil supply in July averaged 93 million b/d, up 230,000 b/d from a month ago and 840,000 b/d from a year ago………………………………………..Full Article: Source

Optimism over gold’s chances could be misplaced

Posted on 19 August 2014 by VRS  |  Email |Print

Gold bulls are the economic market equivalent of the apocalypse-fearing survivalists portrayed in the common television show Doomsday Preppers. They buy the yellow metal mainly because of concern that monetary authorities, primarily in the created world, will lose control of inflation and their currencies’ worth through maintaining low interest rates and quantitative easing too lengthy. If the gold bugs are established right, they will prosper though investors in equities and other assets suffer from rampant inflation and serious financial recession.
Possibly a kinder way of searching at gold investment is to say it tends to make sense as lengthy as actual interest prices stay damaging, as is currently the case in much of the Western planet………………………………………..Full Article: Source

Platinum:Palladium Ratio At Lowest Since 2002 - Mitsubishi

Posted on 19 August 2014 by VRS  |  Email |Print

The ratio of platinum to palladium prices are at their lowest since 2002, falling to 1.63, says Jonathan Butler, precious metals strategist at Mitsubishi. This comes as palladium notched a new 13-year high and outperformed other precious metals.
“We remain of the view that investor interest stemming from the positive underlying fundamentals could see $900 challenged in the near term. According to Statistics South Africa, the country’s PGM mining output fell 37.2% in June, an ‘improvement’ on the 48.5% fall in May but a figure that reflected the severe impact of the five-month AMCU strike………………………………………..Full Article: Source

Global economic strains hurt commodities demand

Posted on 18 August 2014 by VRS  |  Email |Print

Oil and gold fell this week, with demand for the commodities pressured by strains in the global economy. OIL: Prices slid on a slew of downbeat economic data from around the world, analysts said. The sharp falls in oil prices on Thursday coincided with the release of data showing growth in the eurozone stalled in the second quarter. Germany, the bloc’s No. 1 economy, shrank by 0.2 percent and France, the second-largest, had zero growth for six straight months.
Prices also came under pressure from a string of disappointing Chinese data on Wednesday and signs of weak demand, especially in the US, which said crude stockpiles rose for the first time in seven weeks………………………………………..Full Article: Source

Oil and Turmoil in the Middle East

Posted on 18 August 2014 by VRS  |  Email |Print

Whereas most primary commodities have dropped drastically in price, crude oil remains as much as $100 per barrel. It is in effect a result of manipulative actions and is unlikely to be sustained over the long term.
The Organization of Petroleum Exporting Countries (OPEC) has been driving the high oil prices through manipulative behaviors such as limiting oil production quotas. With the current pricing mechanism, oil is only partially affected by the relationship of supply and demand. Despite the regime change in Egypt and factional conflicts over Libyan oil fields, instability in the world’s most oil-rich region has little to do with today’s high energy prices………………………………………..Full Article: Source

An Impending Oil Shortage?

Posted on 18 August 2014 by VRS  |  Email |Print

An uncertain investment climate in oil-exporting Middle Eastern countries may lead to a two million bpd shortfall and a $15 jump in oil prices by 2025. Forget North America’s shale revolution, the world needs Middle East oil for long-term sustainability and to quench growing global demand for fossil fuels.
The International Energy Agency’s (IEA) latest report on global energy investments notes that while unconventional crude oil and natural gas reserves from North America have snared the majority of investments over the past decade, the Middle East will be crucial to meet the energy demand of a fast-growing world………………………………………..Full Article: Source

Fateful month for gold at hand

Posted on 18 August 2014 by VRS  |  Email |Print

Why could September be fateful for the precious metals complex? First, consider its history within the current secular bull market. The years 2005, 2007, 2009 and 2010 have seen very important breakouts in either or both gold and gold stocks in the month of September.
Conversely, September marked important peaks in 2008 as well as in each of the past three years! Currently, Gold and more so the gold miners are consolidating their recent gains just below very important resistance. This consolidation figures to end before the end of September which means September will produce another important inflection point………………………………………..Full Article: Source

Commodities Fall to 6-Month Low as Gain for Year Paring

Posted on 15 August 2014 by VRS  |  Email |Print

Commodities erased gains for the year as oil and grains declined on signs of ample supplies as economic growth halted in Europe and factory output slowed in China, the biggest consumer of industrial metals and energy.
The Bloomberg Commodity Index of 22 raw materials dropped 0.5 percent to 125.593 by 5:11 p.m. in London, for a 0.1 percent decline this year. Lean hogs, Brent crude and gasoline fell at least 2 percent today. Lean hogs, Brent crude and aluminum fell at least 1.6 percent……………………………………….Full Article: Source

Oil Nationalism Seen Reversing by IEA Amid Shale Boom

Posted on 15 August 2014 by VRS  |  Email |Print

The wave of resource nationalism among oil-producing nations that helped propel prices to a record in 2008 is dissipating as competition from U.S. shale stirs governments to offer better terms, the IEA said.
Sliding crude prices in the face of supply threats in Iraq and Libya reflect that industry concerns of scarcity have been replaced with a perception of sufficiency, said Antoine Halff, head of the Paris-based International Energy Agency’s industry and markets division………………………………………..Full Article: Source

Oil and the prospect of a Chinese shale boom

Posted on 15 August 2014 by VRS  |  Email |Print

From the charts it increasingly looks like somebody somewhere is enforcing an unofficial trading band, capped on the top-end by SPR releases or Opec production hikes, and propped up on the bottom-end by monetary policy and strategic supply cuts.
But the weirdest thing of all is that the prospect of supply disruption isn’t doing much to prices at all. More than that, our old friend contango is threatening to make a significant come back in the Brent market………………………………………..Full Article: Source

Gold demand sinks 16% year-on-year in Q2

Posted on 15 August 2014 by VRS  |  Email |Print

Global gold demand declined sharply in the second quarter as prices steadied following exceptional circumstances in the same period of last year, according to the latest World Gold Council (WGC) report.
Bullion demand stood at 964 tons in the second quarter, down 16 percent on year, when demand totaled 1,148.3 tons, the report published Thursday found. However, the decline came as no surprise given the contrast in market conditions between the periods………………………………………..Full Article: Source

Global gold demand returning to positive long term trends

Posted on 15 August 2014 by VRS  |  Email |Print

The latest World Gold Council (WGC) quarterly Gold Demand Trends analysis as usual makes for some interesting reading. With stats prepared by Thomson Reuters GFMS it at least brings us a regular consistent snapshot of what is happening in global demand for the precious metal and this time around it sees the demand as ‘recalibrating’ towards the previous long term trend.
Gold demand in 2013 was exceptionally strong – despite, or perhaps because of, the gold price crash - with an enormous surge, initially mostly at end Q1 and in Q2 from China and levels continued at a high rate for the remainder of the year too. Indian demand early on was also high ahead of the anticipated, and subsequently applied, import restrictions……………………………………….Full Article: Source

US sheet prices remain high, but spot market tenuous

Posted on 15 August 2014 by VRS  |  Email |Print

US sheet producers are enjoying relatively high, stable pricing compared with the rest of the world, but their position is far from guaranteed, market sources said Thursday.
“I think we’re in the beginning of a good expansion of metal use, but I don’t buy into the argument that prices need to go up,” said one trader. “Prices have been high for non-supply and demand reasons for a long time. If these guys aren’t careful, they’re going to kill that goose.”……………………………………….Full Article: Source

Commodity Price Volatility: What Should Distributors Do?

Posted on 14 August 2014 by VRS  |  Email |Print

Dealers in commodities, or in parts that use a significant amount of a commodity with large price fluctuations, have significant business challenges. In previous articles I’ve written about the nature and impacts of commodity price volatility: This article will cover the two challenges of dealers: pricing and working capital.
The owner of a gas station has the same pricing challenge as a copper and brass distributor or a cocoa wholesaler: how to set selling prices when your buying prices change frequently. To understand the right way to set prices, it’s easiest to understand the wrong way: pricing based on historic cost. Let’s say that the gas station owner marks up the price of gas by 50 cents, so when he buys for $3.50, he sells for $4.00………………………………………..Full Article: Source

Copper slumps on Chinese demand concern

Posted on 14 August 2014 by VRS  |  Email |Print

Copper has sunk to its lowest level since June after weak economic data fuelled concerns about the prospects for demand in China, the world’s biggest consumer of the metal. Copper, used in electronics and construction, traded as low as $6,873 a tonne for delivery in three months on the London Metal Exchange on Wednesday after figures showed the amount of money flowing into China’s economy slowed sharply in July.
“When people look at bad data from China and decided to do something about it in metals then they are going to look at copper first,” said Vivienne Lloyd, base metals analyst at Macquarie. The bank estimates China accounts for around 45 per cent of refined copper consumption………………………………………..Full Article: Source

July Sees Consolidation in Commodity Markets

Posted on 13 August 2014 by VRS  |  Email |Print

Commodities declined in July as fundamental risks subsided, according to Credit Suisse Asset Management. The Bloomberg Commodity Index Total Return performance was negative for the month, with 17 out of 22 Index constituents trading lower. Energy was the worst performing sector, down 7.80%. Despite concern that geopolitical risks and events in the Middle East could lead to strength in crude oil, we have largely seen the opposite as many of these fears have yet to result in actual material reductions in production.
Agriculture decreased 7.31% as grains continued to trade lower following the June 30th USDA Quarterly Grains Stocks and Acreage Report which revealed generally larger supply expectations due to rapid planting progress and mild weather. (Press Release)

Laif Meidell: Multiple currents at play in commodities

Posted on 13 August 2014 by VRS  |  Email |Print

Many times, we see that the top-performing commodities on our list will tend to follow a similar theme, such as agricultural commodities, precious metals or energy. Typically driven by similar macro-economic forces, similar commodity types quite often behave like “birds of a feather.” However, this week is a little different, with the top three commodities coming from three distinctly different commodity types.
This seems to indicate that in today’s financial landscape there is no one or two major themes influencing the commodity markets, but instead multiple currents and crosscurrents at play whether they be geopolitical, weather related or economic………………………………..Full Article: Source

Here’s Why Geopolitical Chaos Hasn’t Caused Oil Prices To Spike

Posted on 13 August 2014 by VRS  |  Email |Print

Oil markets have been startingly calm in recent months despite unrest in some of the world’s largest oil producing regions. The price of London-traded Brent crude oil is actually down $5 since mid-May.
The reason is that the world doesn’t need as much of the stuff right now - and global production continues to ramp up. Tuesday, the International Energy Agency announced global oil demand growth in Q2 had fallen to 0.7 million barrels a day, the slowest place since Q1 2012………………………………..Full Article: Source

Overview of the Steel & Iron Ore Market in Q3 2014

Posted on 13 August 2014 by VRS  |  Email |Print

The commissioning of new iron ore capacity combined with a dearth of disruptions to supply have boosted availability of cheap iron ore, which has weighed on prices. In most regions, steel prices have remained low because raw material prices have fallen and competition between steelmakers remains active.
The exception is North America where disruptions to steel production and pent-up demand that has built up following weather-related issues in the first quarter have sent prices significantly higher. Still, this has opened the window for imports, which are likely to weigh on prices before too long………………………………..Full Article: Source

Indonesian nickel ban resonates globally

Posted on 13 August 2014 by VRS  |  Email |Print

Indonesia’s ban on nickel ore exports is resonating globally as prices climb to the highest since 2012, prompting companies from Avebury Nickel Mines Ltd. to Poseidon Nickel Ltd. to restart operations at idled mines.
Avebury, based in Perth, plans to reopen a deposit in Tasmania six years after it was mothballed. Poseidon is preparing to resume production at a mine in Western Australia, while Panoramic Resources Ltd. may restart mining at its Copernicus deposit in the same state. More producers globally may reactivate facilities as prices extend gains, according to OAO GMK Norilsk Nickel, the world’s largest supplier………………………………..Full Article: Source

Commodity Price Gains Ease Urgency of Mining Disposals, E&Y Says

Posted on 12 August 2014 by VRS  |  Email |Print

Rising commodity prices in the second quarter of the year strengthened mining companies’ balance sheets, reducing the urgency of their plans to sell unwanted assets, Ernst & Young LLP said.The number of mining mergers and acquisitions declined 41 percent to 112 in the quarter from a year earlier, E&Y said in a report today. The value of the deals was $9.5 billion.
Nickel prices jumped 39 percent in the quarter from a year earlier, aluminum rose 6.7 percent and copper gained 3.9 percent at the London Metal Exchange. The largest mining companies consider divestments as a way of reducing debt, maximizing returns on capital and optimizing their portfolios, the consultants said. Stronger balance sheets have reduced the pressing need for that, according to E&Y……………………………………Full Article: Source

Geopolitical tensions to affect Agri, Energy; Gold to lose resilience: Deutsche Bank

Posted on 12 August 2014 by VRS  |  Email |Print

The current quarter witnessed the worst performance from agriculture and energy and a bright spot in industrial metals. The decline in long time yields shown by precious metals is unlikely to sustain over the medium term, indicating that Gold’s resilience is likely to fade, according to a Deutsche Bank report.
The Russian ban on European and US food is only likely to have a limited impact globally as its direct result will be domestic inflation. The real issue for agriculture will be the excessive rains in France, Germany and Ukraine and their impact on this year’s harvest. The rains have already affected Wheat prices……………………………………Full Article: Source

Economic, Geopolitical Worries Push Gold Up

Posted on 12 August 2014 by VRS  |  Email |Print

Gold rose to two-week highs last week as worries grew over economic weakness in the euro zone and tensions between Russia and the West. The rise in gold continued a rally sparked Tuesday afternoon, when Polish Foreign Minister Radoslaw Sikorski said Russian troops are poised to pressure or invade Ukraine, causing gold prices to reverse losses and head higher in aftermarket electronic trading.
Conflicts in Ukraine and the Middle East have helped buoy gold prices in recent months, even as the market has been weighed down by expectations that the Federal Reserve may tighten monetary policy sooner than expected, according to the Wall Street Journal……………………………………Full Article: Source

Citi still sees opportunity in more regulated, less volatile commodities markets

Posted on 11 August 2014 by VRS  |  Email |Print

Citi is confident that it can run a lucrative commodities business in less volatile, more heavily regulated markets, the bank’s head of commodities sales told Metal Bulletin. Increasing compliance costs and low volatility have together driven margins in commodities banking progressively lower over the past few years and changed the landscape of the sector markedly, Citi’s José Cogullodo said in an interview.
With costs rising and order volumes falling, running a vanilla agency-style commodities brokerage is not an attractive proposition in the post-crisis, post-supercycle environment, he said. In addition, new regulations are prohibiting banks from trying to boost profits by trading commodities for their accounts. In any event, this is becoming less rewarding as commodity prices chop about in narrower ranges, he said…………………………………….Full Article: Source

OPEC Sees Lower 2014 Oil Demand Growth, Pumps More

Posted on 11 August 2014 by VRS  |  Email |Print

OPEC trimmed its 2014 global oil demand growth forecast for a second consecutive month and said the group managed to increase output in July despite violence in Iraq and Libya, pointing to more comfortable global supplies. In a monthly report on Friday, the Organization of the Petroleum Exporting Countries trimmed its projection for growth in global demand this year to 1.10 million barrels per day (bpd), down 30,000 bpd, citing weaker-than-expected U.S. demand.
“The slow and uneven global recovery continues,” OPEC said in the report. In 2014, “U.S. oil demand remains strongly dependent on the development of the U.S. economy, however the risk is skewed to the downside compared to the previous month.”…………………………………….Full Article: Source

Commodity Markets Fight Off Geopolitical Concerns

Posted on 08 August 2014 by VRS  |  Email |Print

The market has fought off geopolitical concerns with the brent crude oil price falling to the lowest level this year. The risk that new sanctions on Russia will constrain the country’s exports of energy, metals and grains is likely to be a latent concern in commodity markets for as long as the conflict goes on.
The global economic recovery is gaining traction. Growth in the Chinese economy has accelerated recently and the US recovery is strengthening. We are therefore optimistic on behalf of the global economy and expect growth above 4% next year………………………………………..Full Article: Source

Investors warm to commodities in search for return

Posted on 07 August 2014 by VRS  |  Email |Print

Global uncertainty, coupled with the strength of the Chinese markets, is leading U.S. investors back into commodities. Investors put more money into commodities ETFs and ETNs in July than they have in any single month over the past two years, according to ETF.com., which provides research on exchange-traded funds and exchange-traded notes.
The lift came as Chinese markets — and, in many cases, the funds tracking them — notched their best gains since late 2012, raising hopes that the world’s second-largest economy will support demand for the industrial metals used to manufacture cars, buildings and consumer electronics bought by the country’s growing middle class………………………………………..Full Article: Source

Are commodities’ days of true diversification behind them?

Posted on 07 August 2014 by VRS  |  Email |Print

The ability of commodities to offer uncorrelated returns has historically given them status as an important diversifier, but has this reputation been irreparably damaged by structural change in the years since the financial crisis?
Before 2009 correlations between commodity prices and stock markets were close to zero, cementing their reputation as reliable portfolio diversifiers. While gold is a more obvious diversifier, other precious metals, industrial metals, oil and agricultural commodities continue to be used to broaden a portfolio’s mix from stock, bonds and cash………………………………………..Full Article: Source

Drums of War Sound for OPEC

Posted on 07 August 2014 by VRS  |  Email |Print

Amid war and rumors of war, it seems odd that oil prices have dropped so far in August. That might be because another war could be brewing: within OPEC. Saudi Arabia on Wednesday released September official selling prices for its oil. It offered bigger discounts for Asian and U.S. buyers compared to August’s levels, while raising prices for Europe.
As energy economist Phil Verleger pointed out in a recent report, this could indicate a growing battle for market share. Rising U.S. shale oil output has caused American imports of oil from West Africa to plummet from an annualized average of two million barrels a day in late 2007 to about 300,000 barrels a day currently. That forces countries such as Nigeria to push their barrels towards other markets, such as Asia—putting them in direct competition with Saudi Arabia and other OPEC members in the Middle East………………………………………..Full Article: Source

Gold Prices Rally on Economic, Geopolitical Worries

Posted on 07 August 2014 by VRS  |  Email |Print

Gold prices rose to their highest level in nearly two weeks on Wednesday, as worries grew over economic weakness in the euro zone and tensions between Russia and the West.
Gold for December delivery, the most actively traded contract, rallied $22.90, or 1.8%, to $1,308.20 a troy ounce, the highest settlement price since July 21. The contract posted the biggest one-day percentage gain since June 19. Italy fell back into recession for the third time since 2008, data showed Wednesday, signaling that the euro zone’s recovery has hit a major stumbling block………………………………………..Full Article: Source

Commodities May Continue Slump Into August, But Buying Opportunities Possible

Posted on 06 August 2014 by VRS  |  Email |Print

July was the worst month for commodities overall since May 2012, and the weak performance is likely to continue into August, market watchers said. But weaker markets can offer buying opportunities for savvy traders, they added.
The S&P GSCI lost 5.3% in July, giving up almost its entire gain for the year, and as of Monday has roughly a flat return year-to-date. According to data released by S&P Dow Jones Indices, one of the worst performers in their indexes was unleaded gasoline, which fell 8.1% in July. This is the fifth-worst July on record since 1988 and is also the worst July since July 2008. The agriculture sector lost 8.7% in the S&P GSCI index, falling to its lowest level since July 2010………………………………………..Full Article: Source

Barings backs resources sector equities over commodities

Posted on 06 August 2014 by VRS  |  Email |Print

Resources sector equities are currently more attractive than direct investments in physical commodities and investors should focus on investing in ‘companies not commodities’ to benefit from an increasing global demand for resources, according to Baring Asset Management (Barings).
The opportunity in resources equities is as strong as it has been for several years, believes Barings. Its positive outlook is based on the size of differential between what it sees as positive company specific drivers versus a negative – often macro driven – consensus view………………………………………..Full Article: Source

Zinc positioning shows investor bullishness

Posted on 06 August 2014 by VRS  |  Email |Print

The shift in investor sentiment that has helped propel the price of zinc to a near three-year high has been highlighted by a new report from the London Metal Exchange that details long and short positioning in industrial metals.
Figures from the exchange’s Commitment of Traders Report, published for the first time on Tuesday, shows money managers held a long position of nearly 135,900 futures contracts in zinc as of August 1 – nearly 30 per cent of open interest, or total number of outstanding contracts………………………………………..Full Article: Source

America’s Oil Export Policy Is Stuck in the ’70s

Posted on 05 August 2014 by VRS  |  Email |Print

The unexpected increase in the production of shale oil, a light oil called condensate and natural gas in the U.S. has upended many assumptions about the U.S. energy market. As the oil and gas bonanza continues, the U.S. ban on crude-oil exports looks increasingly outdated, arbitrary and economically damaging.
With Europe poised to endanger its gas supply by imposing more sanctions on its major supplier Russia, the possibility of energy exports from America takes on an important security dimension too………………………………………..Full Article: Source

Commodities slipping down the asset class league table

Posted on 04 August 2014 by VRS  |  Email |Print

Commodities have slipped further down the league table of asset class performance over the past week. The destruction in returns during July has been concentrated in the agricultural and energy sectors. In the event of signs of a further acceleration in US economic activity, Deutsche Bank expect precious metal returns will be the next commodity sector to suffer declines.
Energy: The rapid decline in crude oil inventories at Cushing helps to explain the tightness in WTI fundamentals. However, this inventory drawdown may draw to a close after the summer as pipeline infrastructure starts bringing additional crude into Cushing. Meanwhile, weak physical demand for crude oil has trumped geopolitical risks and facilitated a recovery in refinery margins in the US Gulf Coast and Northwest Europe………………………………………..Full Article: Source

India Snatching Up Swiss Gold, Silver

Posted on 04 August 2014 by VRS  |  Email |Print

Gold loving India is hoarding Swiss gold, and recently accounted for 42% of total gold and silver leaving Switzerland. According to the Swiss government, its total value of exported gold, silver and coins in the month of June stood at 3.9 billion Swiss franc ($4.3 billion), of which India accounted for 1.63 billion francs ($1.8 billion).
Indian demand for gold has taken overall Swiss exports this year to to 32.1 billion francs. And out of that total, gold exports alone to India hit 7.3 billion francs, or roughly 23% of the market………………………………………..Full Article: Source

India: Forward trades in commodity markets to begin this month

Posted on 04 August 2014 by VRS  |  Email |Print

India’s commodity markets will see the debut of forward contracts later this month, a move termed as an attempt to create a national agricultural market. The National Commodity & Derivatives Exchange Ltd (NCDEX) will launch forward contracts based on two commodities—sugar and maize— by the third week of August after receiving a go-ahead from the commodity market regulator.
Commodity market participants say that the introduction of forward contracts could be a game-changer, as it reduces counter-party risk and keeps out speculators, besides creating a central platform for forward trading in agricultural commodities………………………………………..Full Article: Source

Commodity ETFs: The makings of a perfect partnership?

Posted on 01 August 2014 by VRS  |  Email |Print

Commodity price moves are making headlines again after a relatively quiet period earlier this year. The intensifying crisis in Iraq is fuelling the rise in crude oil prices, the six-month long miners’ strike in South African has pushed platinum and palladium prices higher and gold is also attractive again as a safe-haven buy.
For many investors exchange-traded products (ETPs) are becoming the financial instrument of choice when it comes to commodities as they are easy to trade, they bypass some of the regulatory restrictions linked to futures and they come with relatively low fees………………………………………..Full Article: Source

Oil Majors Pivoting Away from Risky Countries

Posted on 01 August 2014 by VRS  |  Email |Print

The rising tide of political instability around the world is negatively affecting the some of the oil industry’s largest companies, and several are considering withdrawing their investments in risky areas. Violence, government turmoil, sabotage, and economic sanctions are presenting serious challenges to the oil majors, after years of expanding deeper and deeper into some of the least developed parts of the world.
The Wall Street Journal wrote on July 27 about several companies that are pivoting away from troubled regions, and moving towards industrialized countries — willing to assume the higher cost of operating in richer nations as the price for a more stable investment climate………………………………………..Full Article: Source

Russia Risk Seen Prompting BNP Paribas Commodity Bond Prepayment

Posted on 01 August 2014 by VRS  |  Email |Print

Bonds backed by loans made by BNP Paribas SA (BNP) to commodity traders will be repaid early because there’s a shortage of borrowers seeking to finance new shipments amid conflict in the Ukraine, according to Fitch Ratings.
The $131.6 million Lighthouse Trade Finance Issuer I Ltd. notes will be redeemed because of “the shortage of commodity transactions” originated by BNP Paribas’s Geneva office, which focuses on energy commodities sourced from eastern Europe, including Russia, Fitch said in a statement………………………………………..Full Article: Source

OPEC oil output rises in July on fragile Libyan rebound

Posted on 31 July 2014 by VRS  |  Email |Print

OPEC’s oil production rose in July from June, a Reuters survey found on Wednesday, as a fragile recovery in Libyan supply outweighed fighting in Iraq and reduced output from Angola.
Despite the increase, unrest in Africa and the Middle East is still weighing on supply. That could hinder OPEC’s ability to boost output later in the year, when the International Energy Agency expects demand for OPEC crude to rise………………………………………..Full Article: Source

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