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Commodities Briefing - Category | Trading more

Few commodities buck falling trend

Posted on 29 October 2014 by VRS  |  Email |Print

Most everything we consume begins as a commodity, so when commodity prices go up, it transfers wealth and power from consumers to producers, but when commodity prices fall, it’s as close as it gets in economics to getting two meals for the price of one, or double coupons at your favorite grocery store. Such a moment appears to be happening now.
With few exceptions, most commodities have been falling over the past two months, with some falling rather quickly. Commodity prices are being pushed lower by an increased supply of most commodities, a slowing global economy, as well as a slowing China, the world’s largest consumer of most raw materials. Of the 69 commodities we follow weekly, only biofuels, cattle and sugar are in the positive over the past eight weeks………………………………………..Full Article: Source

BSE plans foray into commodity trading; board gives nod for new platform

Posted on 28 October 2014 by VRS  |  Email |Print

Asia’s oldest stock exchange BSE will soon make a foray into commodity trading. A proposal to start a new platform for commodities trading was approved by the BSE board on October 20, said two sources familiar with the development.
BSE’s rival in equity trading, the National Stock Exchange (NSE), already has a presence in the commodity segment through a stake in National Commodity & Derivatives Exchange. Bourses such as BSE entering commodity trading are eyeing the passage of Forwards Contract Regulations Act (FCRA) that could boost trading volumes as it allows launch of further derivative products in the segment. ……………………………………….Full Article: Source

Citi buys Deutsche commodities trading book in expansion push

Posted on 21 October 2014 by VRS  |  Email |Print

Citigroup Inc has bought Deutsche Bank AG’s energy and metals book, a source familiar with the matter said, in the latest sign of expansion from the U.S. firm in commodities trading as rivals retrench.
Citi won Deutsche’s oil, metals and power books this summer and autumn, the source said, after a bidding round that saw several Wall Street firms and trading houses chasing the opportunity to take on the positions of a once top-five commodities bank………………………………………..Full Article: Source

Volatility is spice of life in commodities market

Posted on 20 October 2014 by VRS  |  Email |Print

On the eastern side of Australia this week, the opening of a new mine in an oversupplied commodity sector was warmly welcomed as a humanitarian act that was providing jobs and hope. Over on the nation’s western coast, plans to increase supply into another oversupplied commodity were sharply criticised as a “flawed strategy” that was harming the local jurisdiction.
The two commentators were, famously, elected statesmen from the same political church, yet political discourse was not the only place where wild volatility was the order of the day. Amid gyrations in global markets, prices for some of the commodities with the biggest influence on the Australian economy, particularly oil and iron ore, were tracking unpredictable paths………………………………………..Full Article: Source

Low oil price means high anxiety for Opec as US flexes its muscles

Posted on 20 October 2014 by VRS  |  Email |Print

Motorists, airlines and industry are enjoying low energy costs, the US is relishing its reduced reliance on the Middle East – and Opec is wondering how to reassert its authority. During a week of turmoil on the global stock markets, the energy sector played out a drama that could have even bigger consequences: a standoff between the US and the Opec oil-producing nations.
While pension holders and investors watched aghast as billions of pounds were lost to market gyrations, a fossil-fuel glut and a slowing global economy have driven the oil price down to a level that could save the world $1.8bn a day on fuel costs. If this is some consolation for households everywhere after last week’s hit on stock market wealth, it means pain for the Opec cartel, composed mainly of Middle East producers………………………………………..Full Article: Source

The Strong Dollar Weighs Heavily on the Commodities Market

Posted on 17 October 2014 by VRS  |  Email |Print

Early in 2014, the commodities markets were doing surprisingly well. China’s appetite for raw material was holding up, and the International Monetary Fund was predicting a decent year of global growth, which meant rising demand for everything from oil to cotton. Then the spell broke. In July, China reported lower imports of oil and copper.
Since the country is the largest consumer of pretty much everything that’s pumped or mined out of the ground, the news sent prices of commodities sliding. On Oct. 2, oil fell below $90 a barrel for the first time in 17 months. Global growth was stalling, and the commodity companies were faced with much lower demand than they’d anticipated in January………………………………………..Full Article: Source

The next paradigm in commodities: Trade houses vs banks

Posted on 16 October 2014 by VRS  |  Email |Print

Agri-business services are dominated by two industries: First, trade houses provide services that vertically integrate from farmers to consumers. Second, financial institutions horizontally integrate the value chain by facilitating an efficient transfer of capital. There is a sweet spot where these two industries intersect in their service offerings: Risk management and Trade financing.
The last two years have witnessed a lot of activity in this point of intersection where there has been a flight of human and financial capital from banks to trade houses. In this article, I will focus on the key reason on such a paradigm shift, and also predict a futuristic scenario how these two service industries will evolve given the technological advance………………………………………..Full Article: Source

How will EMs be affected by commodity price declines?

Posted on 15 October 2014 by VRS  |  Email |Print

Credit Suisse has a new report out on the winners and losers of the recent rout in global natural resource prices. While everyone has been paying attention to the remarkable decline in the value of oil, agricultural commodities and industrial metals have also become a lot cheaper recently:
Unsurprisingly, Credit Suisse thinks Korea, which imports most of its raw materials, should be the biggest beneficiary, while the petro-dependent economies of Venezuela and Russia will feel the most pain. But there are a few surprises worth noting as well………………………………………..Full Article: Source

Expect big silver price surge if gold stays positive

Posted on 15 October 2014 by VRS  |  Email |Print

What a difference 10 days makes. A little over a week ago the gold market was all doom and gloom with the yellow metal crashing back below $1200 an ounce. But with a few extraneous geopolitical and global health factors positively impacting the market, and the possibility of a general stock market crash in the minds of investors, gold has seen positive action on the price front in something of a safe haven turnaround.
But silver, on the other hand, has hardly moved at all. Compare the 30-day kitco gold and silver charts below – courtesy kitco.com and kitcosilver.com. Historically, silver prices have sharply outperformed gold when precious metals prices are rising, and sharply underperformed when they are falling yet this pattern on the upside has just not yet started to appear. But if the recent gold price rise isn’t just a blip then we would expect silver to start to move upwards – and move upwards fast………………………………………..Full Article: Source

Oil Prices Dip Below $90 for First Time in Two Years

Posted on 10 October 2014 by VRS  |  Email |Print

Global oil prices dipped below $90 a barrel for the first time in more than two years Thursday as investors saw new signs that global supplies will continue to surpass demand. Both Brent, the global benchmark, and the U.S. standard are trading more than 20% below a recent high, meeting the definition of a bear market. Prices have slumped for nearly four months as global supplies remain ample.
At the start of PIRA Energy Group’s widely attended seminar in New York on Thursday, the research firm predicted oil prices have further to fall, Reuters reported. PIRA is typically considered optimistic on energy prices, market participants say. The seminar is closed to the press………………………………………..Full Article: Source

Commodity Trading to Consolidate as Earnings Fall: Report

Posted on 07 October 2014 by VRS  |  Email |Print

Commodity trading consolidation will cut the number of major independent players to two or three in each asset class as the industry becomes less profitable, according to Oliver Wyman Group. “We predict that soon only two to three will remain due to an increasingly cutthroat environment,” consultant Oliver Wyman said.
Independent traders are facing increasing competition from oil majors, national energy companies and miners seeking to monetize production as well consumer companies trying to gain greater control over their supply chains, Oliver Wyman said. Traders are competing to secure flows of materials from coal to zinc by offering output deals with producers as margins shrink due to lower price volatility and more transparent markets………………………………………..Full Article: Source

Look Who’s ‘Trading’ Commodities

Posted on 06 October 2014 by VRS  |  Email |Print

In the government’s bid to crack down on risky trading, charities and other nonprofit organizations may become collateral damage. That is causing alarm in the nonprofit world and should be a concern for donors. Under new rules, your local charity could be obligated to register with federal regulators as a commodity-pool operator—even if it doesn’t invest directly in corn or pork bellies.
CPOs, as they are sometimes called on Wall Street, invest in a range of derivatives contracts, including futures, swaps and options on foreign currencies, commodities and interest rates. That is light years away from the mission of most nonprofits. Having to register as a CPO with the Commodity Futures Trading Commission would entail higher costs and more red tape. As a result, if you are a donor or board member, you need to ask a whole new set of questions about how the institution’s money is managed………………………………………..Full Article: Source

Commodities slump to four-year low but is now the time to buy?

Posted on 02 October 2014 by VRS  |  Email |Print

Commodities have slumped to their lowest level in years as growth in China slows and American harvests boom. So is now the time to buy in? Last week, the Bloomberg Commodities index, one of the most widely followed measures of aggregate commodities, fell to its lowest level in four years.
Capital Economics head of commodities research Julian Jessop says the situation with commodities is “far more nuanced” than may be thought. “It is actually encouraging, on balance, for global economic prospects………………………………………..Full Article: Source

IEA Sees New ’Zombie’ Oil Refineries as Trading Grows

Posted on 02 October 2014 by VRS  |  Email |Print

Traders are increasingly taking control of failing refineries in Europe, betting they can make profit from plants that lose money for conventional oil companies, the International Energy Agency said.
The refineries, often acquired for almost no fee, will increase output quickly when margins from fuel sales surge and keep run rates down at other times, Antoine Halff, the head of the IEA’s oil industry and markets division, said at a conference in Singapore today. Conventional oil companies maintain higher processing rates during periods of weaker demand, he said………………………………………..Full Article: Source

An already ugly September for commodities just got real

Posted on 01 October 2014 by VRS  |  Email |Print

September was already shaping up as a brutal month for most major commodites. For some markets, it just got a lot uglier. What’s slamming broad swaths of the commodities market? Everything from supply gluts to the dollar’s Samson-like strength of late.
More specifically, oil has been weighed down by a supply glut tied partly to growing U.S. shale production and waning global demand. Gold futures have slumped amid lackluster physical buying, while grain futures have been slipping due to bountiful crop………………………………………..Full Article: Source

India: Commodity super cycle turning downward, says RBI

Posted on 01 October 2014 by VRS  |  Email |Print

The Reserve Bank of India (RBI) has said global commodities prices have already touched inflexion points and are now on a downward path. The central bank’s statement is based on data on commodity prices, both energy and non-energy, for the past five decades. “Since 1894, four super cycles have been identified, with the last starting in the late 1990s and attributed to rapid and sustained industrialisation and urbanisation in China and other emerging economies,” RBI said.
In the latest commodity super cycle, inflation adjusted prices of commodities rose 60-500 per cent between 1999 and 2010. Oil price rose 467 per cent, metals 202 per cent and the prices of agricultural commodities 77 per cent, the steepest price increases among the four commodity super cycles (after adjusting for inflation)………………………………………..Full Article: Source

CIC to Cut Stake in Singapore Commodity Trader Noble Group

Posted on 30 September 2014 by VRS  |  Email |Print

Sovereign-wealth fund China Investment Corp. is seeking to raise up to 405 million Singapore dollars (US$318 million) by selling a portion of its stake in Singapore-listed commodity trader Noble Group, people with knowledge of the deal said Monday.
CIC, which currently owns close to a 15% stake in Noble Group, will see its holding fall to about 10% post sale, one of the people said. China’s sovereign-wealth fund had spent US$850 million in 2009 to buy a stake in the Hong Kong-based Noble Group, a diversified commodities company with assets ranging from Brazilian sugar mills to Australian iron ore to oilseed-processing facilities in China and India………………………………………..Full Article: Source

Time to buy uranium? The best ways to play it

Posted on 29 September 2014 by VRS  |  Email |Print

Patience could finally start to pay off for investors waiting for a revival of the uranium market that imploded in the aftermath of Japan’s nuclear disaster in 2011. After the spot price hit a nine-year low of $28 (U.S.) this spring on oversupply concerns, dragging uranium equities down with it, many investors believe the commodity used to fuel nuclear power plants has finally hit bottom, as the demand picture brightens.
The price has risen about 30 per cent in recent weeks, to $36.50, driven by additional U.S. and European sanctions against Russia, a major uranium supplier, in its conflict with Ukraine. That threatens to put pressure on the global uranium supply, alongside a recent two-week strike at Cameco Corp.’s McArthur River and Key Lake operations in Saskatchewan………………………………………..Full Article: Source

How Commodity Traders Are Making One Big Bet

Posted on 26 September 2014 by VRS  |  Email |Print

A number of years ago, I worked as an equity portfolio manager at a Commodity Trading Advisor that used trend following models. While I knew nothing about the specifics of their models, I knew that the traders next door appeared white-knuckled at the end of the day. Even though they were diversified across many different contracts, the trading system often steered them into a single big macro bet.
The bet might be characterized as a directional exposure to interest rates, or currencies, etc. It was then I realized that the application of trend following models on commodity, bond and currencies was picking up directional economic trends - but that’s another story………………………………………..Full Article: Source

The Inexorable Rise of Asian Commodities Buyers

Posted on 19 September 2014 by VRS  |  Email |Print

Labeling importers in Asia Pacific as keen buyers of commodities, especially crude oil and natural gas, is right on the money and somewhat unremarkable. Emerging markets are all about development and growth plans needing materials and fueled largely by hydrocarbons.
Purchasing power of commercial buyers always matters, but what I encountered on back-to-back visits to Hong Kong, Shanghai and Tokyo, earlier this month was the indisputable clout of those seeking minerals and materials. This palpable shift in power from West to East has gone well beyond setting prices and is inevitably extending to dictating terms and rules of engagement in the physical commodities market……………………………………..Full Article: Source

China Opens Gold Market to Foreigners Amid Price Ambition

Posted on 19 September 2014 by VRS  |  Email |Print

China will give foreign investors direct access to its gold market for the first time today as the biggest-consuming nation seeks to exert more influence over prices while boosting the yuan’s global use.
The Shanghai Gold Exchange will start trading contracts in the city’s free-trade zone that will be linked to its domestic spot market and available to about 40 international members including Goldman Sachs Group Inc. and UBS AG. Access was previously limited to some Chinese units. Gold in China this year cost as much as $31 an ounce more and $42 less than the London spot price, according to data compiled by Bloomberg……………………………………..Full Article: Source

International gold trading launched in Shanghai free-trade zone

Posted on 19 September 2014 by VRS  |  Email |Print

The Shanghai Gold Exchange officially launched its international trading platform in the city’s free-trade zone (FTZ) last night, the first such board in the zone, with hopes of setting benchmark prices for the precious metal in Asia. It could pave the way for the launch of crude oil futures and other key commodities including iron ore in the testing ground for mainland economic reform.
Premier Li Keqiang made an inspection tour of the 28 square kilometre zone yesterday following a no-show on September 29 last year, when it was inaugurated. “The free-trade zone in Shanghai will have a brighter future and Shanghai will have a brighter future,” the premier told officials and others during the tour, Xinhua reported. “I wish the FTZ to be prosperous and developed.”…………………………………….Full Article: Source

Calm before the storm? Commodity volatility mired at low levels

Posted on 18 September 2014 by VRS  |  Email |Print

Commodity traders curse it while industrial users of oil, metals and grains applaud it. Several years of low volatility on commodity markets have hammered profits for speculators and constricted trading opportunities, while providing stability for firms that buy such goods.
But both camps may get more than they bargained for when the current period of extraordinarily narrow price movement ends, entering uncharted territory after a number of banks departed the sector…………………………………….Full Article: Source

Citi buys Deutsche’s base metals trading book: report

Posted on 18 September 2014 by VRS  |  Email |Print

Deutsche Bank has sold its global base metals trading book to Citigroup Inc, the U.S. bank’s latest move to expand its commodities trading business, according to a report by SparkSpread.
The deal is the second by Citi since Germany’s largest bank and one of the biggest financial players in commodities said it would stop trading energy, agriculture, base metals, coal and iron ore. It has retained its precious metals desk…………………………………….Full Article: Source

Bank commodity trading and the US Fed: An unfolding relationship

Posted on 18 September 2014 by VRS  |  Email |Print

Last week something serendipitous happened. I went to what was ostensibly a briefing and news broke out. The news was that the big French bank BNP Paribas, after some high-level recruitment from a decamping JP Morgan Chase, intends to try and rebuild North American physical electricity trading to go along with its existing natural gas trading operations done primarily through its offices in New York.
BNP’s decision bucks the trend set by a number of other big banks—most notably JP Morgan Chase, Deutsche Bank and Barclays Plc– who have pulled out of several areas of physical energy commodity trading due to a combination of changing market conditions and flagging revenues, but perhaps most importantly, due to mounting regulations…………………………………….Full Article: Source

The Soft-Commodity Outlook

Posted on 18 September 2014 by VRS  |  Email |Print

Almost perfect weather conditions across the principle growing regions in the U.S. and the prospect of record crops continue to push soft commodity prices lower. And with harvesting underway, this trend looks set to continue, with further good weather to come.
For U.S. Wheat, the bearish trend has been slow and steady, starting back in May with the commodity trading at 760 per bushel, before declining steadily, followed by a pause in the 580 to 620 per-bushel area, before that level was also breached, with a further move down followed by an extended phase of price congestion, which extended through the summer months in the 580 to 540 per-bushel region creating a strong and well-defined level of resistance and support…………………………………….Full Article: Source

Biggest banks to overhaul currency trading

Posted on 18 September 2014 by VRS  |  Email |Print

The world’s biggest banks are overhauling how they trade currencies to regain the trust of customers and pre-empt regulators’ efforts to force changes on an industry tarnished by allegations of manipulation.
Barclays, Deutsche Bank, Goldman Sachs, Royal Bank of Scotland (RBS) and UBS, which together account for 43 percent of foreign exchange trading by banks, are introducing measures to make it harder for dealers to profit from confidential customer information and take advantage of clients in the largely unregulated $5.3 trillion (R58.4 trillion)-a-day currency market, according to people with knowledge of the changes…………………………………….Full Article: Source

Increase in Iran oil storage to increase export flexibility

Posted on 12 September 2014 by VRS  |  Email |Print

A substantial increase in Iranian oil storage capacity will give the sanctions-hit country more flexibility to export crude, the International Energy Agency (IEA) said on Thursday.
The United States and the European Union have imposed sanctions on the Islamic Republic over its nuclear programme, preventing it from reaching production capacity. Limited storage capacity has forced it to keep crude on National Iranian Tanker Co (NITC)-controlled tankers at sea………………………………………..Full Article: Source

China to export more steel

Posted on 11 September 2014 by VRS  |  Email |Print

“The mills in China have been consistently overproducing. The major reason for this is the strong profitability of the industry – the price of both the ingredients (iron ore, coal, freight, fluxes etc.) and the finished steel has decreased, but the costs of producing a ton of steel fell more, so the profit margins have actually improved.
“For overproduction, steel is either stockpiled or it is exported. A quick look at the inventory numbers (nominal or seasonally adjusted) reveals that steel has actually been drawn out of stockpiles, not added. Hence we are left with the export option………………………………………..Full Article: Source

EU pushes for urgent energy deal in U.S. trade pact

Posted on 10 September 2014 by VRS  |  Email |Print

The United States should commit to exporting oil and natural gas to Europe under a transatlantic trade deal in light of the European Union’s geopolitical situation, the EU trade commissioner said on Tuesday.
Tension between Russia and the West over the future of Ukraine is spurring the European Union to renew efforts to end decades of dependence on Russian gas. One solution would be greater access to abundant U.S. resources………………………………………..Full Article: Source

China commodity imports flashing warning signs: Russell

Posted on 09 September 2014 by VRS  |  Email |Print

If you were trying to distil China’s commodity imports for August into a single word, that word may be cautious. Crude oil imports rose 6 percent from a month earlier, but China was a net fuel exporter for a fourth month this year, meaning that some of the additional crude imports were shipped out as refined products.
In assessing the state of Chinese oil demand, the impact of the trade in refined products is becoming increasingly important, as the trend is now clearly toward rising net exports, particularly of diesel………………………………………..Full Article: Source

China’s Copper Imports Slow Due to Probe

Posted on 09 September 2014 by VRS  |  Email |Print

China’s commodity imports in August mostly softened, led by a 12% decline in the volume of copper shipments from a year earlier due to the fallout from a government probe into metal financing at Chinese ports. Copper imports fell to 340,000 metric tons, according to customs data Monday.
Chinese authorities earlier this year launched investigations into alleged fraud involving aluminum and copper stocks used as collateral for loans in China. Commodity-backed financing has fueled imports of copper in recent years, but this appears to be ebbing due to the investigations………………………………………..Full Article: Source

Commodity trading: End-to-end game

Posted on 05 September 2014 by VRS  |  Email |Print

Banks, harried by regulators and short of capital, are fleeing the commodities business. Deutsche Bank, Morgan Stanley and UBS either shuttered or shrank their commodities operations last year; this year Barclays, Credit Suisse and JPMorgan Chase have scaled back. But even as they retreat, commodity-trading houses, most of which began life as simple middlemen, are getting ever more deeply involved in the extraction, shipping and refining of raw materials.
The buyer of JPMorgan Chase’s physical commodities unit, for instance, was Mercuria, a ten-year-old firm based in Switzerland that started out trading oil but now owns (or has joint ventures with) oil-exploration companies, oil-terminal and pipeline operators, coal and iron-ore mines and biofuel refineries………………………………………..Full Article: Source

Commodity Trade Finance: uncovering the Opportunities in Africa

Posted on 04 September 2014 by VRS  |  Email |Print

In a recent Opalesque Radio interview with Sona Blessing, Nicolas Clavel, founder and chief investment officer of Scipion Capital, an investment manager specialising in self-liquidating short-term Commodity Trade Finance (CTF) with a focus on Africa, elaborates on the commodity trade finance opportunities, the hurdles and their ability to deliver consistent risk-adjusted returns.
From a sector perspective, the commodity trade finance fund focuses on minerals and agricultural commodities produced in Africa, which then tend to be shipped to destinations such as (mainly) China and Europe. The fund also finances the import of commodities into Africa, which is in sync with the continent’s growth and lack of available supplies for high in demand inputs such as cement and diesel………………………………………..Full Article: Source

Commodities trading the latest move by Shanghai to talk up free trade zone

Posted on 29 August 2014 by VRS  |  Email |Print

Commodities exchanges the latest idea for city’s free trade zone, and part of its plan to establish itself as a hub for international commerce. In the latest attempt to raise the profile of its Hong Kong-style free port, Shanghai has unveiled ambitious plans to create a clutch of international commodity trading platforms in its free-trade zone (FTZ).
According to an action plan to develop the city into a centre for international commerce, major commodities including iron ore, cotton and copper will be traded on the internationalised markets inside the 28.8 sq km FTZ by 2015. The announcement follows long-heralded plans to establish international boards for crude oil futures and gold trading in the zone………………………………………..Full Article: Source

China to Let Foreign Investors Trade in Shenzhen Carbon Market

Posted on 25 August 2014 by VRS  |  Email |Print

China, the world’s biggest emitter of greenhouse gases, said it will allow foreigners to trade carbon permits in Shenzhen, making it the nation’s first emissions exchange to welcome outside investors. The Shenzhen exchange has yet to set the date or finalize other entry procedures for foreign investors. The State Administration of Foreign Exchange has allowed foreign participation in principal, according to a statement today on the website of the China Emissions Exchange.
The southern city of Shenzhen near Hong Kong started carbon trading last year as the first of seven pilot programs in China. The exchanges, constituting the world’s biggest emissions trading system after Europe, may be a precursor to a nationwide system………………………………………..Full Article: Source

ICAP launches Singapore coal derivatives trading

Posted on 22 August 2014 by VRS  |  Email |Print

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

Commodities: You don’t need to know them to trade them

Posted on 21 August 2014 by VRS  |  Email |Print

While there are more opportunities to trade commodities these days, investors remain reluctant to jump on board, citing a lack of understanding about what they are as a key reason. Commodities include products such as gold, silver, oil, wheat, sugar, cattle and pork bellies. OANDA senior technical analyst Stuart McPhee says he finds retail investors aren’t generally interested in trading commodities.
“Anecdotally, when you talk about trading something like sugar or wheat, people say they don’t understand it and wouldn’t know how to trade it. Our trading activity reflects this.” This is despite there being more ways to trade them, he says………………………………………..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

Commodity trading in India on the rise as investors return

Posted on 20 August 2014 by VRS  |  Email |Print

A year after a US$920 million payment default at a spot commodities bourse cut trading from gold to soya beans futures, jolting India’s biggest brokerages, investors are returning as newer regulations buoy confidence.
The volume of commodities traded on the Multi Commodity Exchange Ltd, India’s biggest commodity bourse, has rebounded from a five-year low after the regulator tightened warehousing and shareholding norms in response to the payment crisis that unravelled at the National Spot Exchange Ltd (NSEL). Volumes on the National Commodity & Derivatives Exchange of India Ltd, the second largest bourse, have recovered from a 10-year low………………………………………..Full Article: Source

5 Commodities Setups to Play

Posted on 20 August 2014 by VRS  |  Email |Print

Stocks made big gains yesterday, the big NASDAQ Composite in particular making new multiyear highs as buyers charged into equities to start the week. But one corner of the market has quietly been outperforming the rest — and no, it’s not technology. I’m talking about the “commodity stocks,” basic materials sector names with outsized exposure to the commodity markets. Typically, commodity-centric names tend to have low correlations with the rest of the broad market, but not in 2014. Instead, materials names are just magnifying the S&P 500’s gains this year.
So far, the S&P has managed to climb 7.19% higher since the start of the calendar year — but the basic materials sector has basically done double, climbing 14.34% over that same stretch. Even better, there are still some big trading opportunities in materials right now………………………………………..Full Article: Source

After the Boom–Commodity Prices and Economic Growth in Latin America and the Caribbean

Posted on 15 August 2014 by VRS  |  Email |Print

After skyrocketing over the past decade, commodity prices have remained stable or eased somewhat since mid-2011—and most projections suggest they are not likely to resume the upward trend observed in the last decade. This paper analyzes what this turn in the commodity price cycle may imply for output growth in Latin America and the Caribbean.
The analysis suggests that growth in the years ahead for the average commodity exporter in the region could be significantly lower than during the commodity boom, even if commodity prices were to remain stable at their current still-high levels. Slower-than-expected growth in China represents a key downside risk. The results caution against trying to offset the current economic slowdown with demand-side stimulus and underscore the need for ambitious structural reforms to secure strong growth over the medium term………………………………………..Full Article: Source

Free exchange: Aid to the rescue

Posted on 15 August 2014 by VRS  |  Email |Print

Fifty years ago the first United Nations Conference on Trade and Development launched a debate about how much money rich countries should give to poor ones to reduce poverty and bolster growth. In the end, the UN settled on a figure of 0.7% of national income—a target subsequently reaffirmed by endless international powwows.
Although few countries have met it, aid spending in real terms has nonetheless increased steadily ever since, to $134.8 billion in 2013. Yet economists are still arguing about how much the aid helps—if it helps at all………………………………………..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

Escalating geopolitical discord lifts commodities

Posted on 12 August 2014 by VRS  |  Email |Print

After hitting a sixth month low at the end of July, the broad based Bloomberg Commodity Index (formerly known as DJ-UBS) managed a small comeback this week. Multiple geopolitical worries halted the slide in crude oil and gave precious metals a lift while industrial metals took stock following disappointing economic data from China and Europe.
The agriculture sector was higher as the grain sector returned from the abyss, thereby helping to offset losses in soft commodities, not least coffee and sugar, while livestock fell for a third week……………………………………Full Article: Source

China’s mixed commodities imports data shows demand revival absent

Posted on 11 August 2014 by VRS  |  Email |Print

China’s imports of iron ore and soybeans maintained their upward trajectory in July but shipments of crude oil, copper and coal dropped, underscoring the relatively sluggish domestic demand in the world’s second-biggest economy. Copper shipments fell 2.9 percent compared to June, coal imports dropped 8.1 percent and crude oil imports slid 1.1 percent to their lowest daily rate since March, but July deliveries of iron ore surged 10.7 percent and soybeans rose 17 percent on the month, customs data showed on Friday.
The rise in imports of both iron ore and soybean, however, was attributed by analysts to opportunistic buying on favourable price moves, with subdued domestic demand seen potentially driving a surge in the stockpiles of both the commodities……………………………………..Full Article: Source

Russia bans agricultural products from EU, USA, Australia, Norway, Canada

Posted on 08 August 2014 by VRS  |  Email |Print

Russian PM Dmitry Medvedev has signed a decree on the full ban for imports of beef, pork, poultry meat, fish, cheese, milk, vegetables and fruit from Australia, Canada, the EU, the US and Norway. The ban will last a year, starting August 7.
The Prime Minister also said Russia has stopped transit flights by Ukrainian airlines to such destinations as Georgia, Azerbaijan, Armenia and Turkey, adding that the country was considering a ban of transit flights for European and US Airlines to the Asia-Pacific region………………………………………..Full Article: Source

Russia to ban all U.S. agricultural imports

Posted on 07 August 2014 by VRS  |  Email |Print

Retaliating for U.S. sanctions over Ukraine, Russia will ban or limit all American agricultural products for up to a year, a Kremlin official said Wednesday. All fruits and vegetables from the European Union will also be locked out, the country’s agricultural and veterinary watchdog told RIA Novosti. Produce from Canada and Japan will also be blocked.
The complete list of banned products, to be announced Thursday, will be “very substantial,” said Alexey Alekseenko, an assistant to the head of the Federal Service for Veterinary and Phytosanitary Surveillance………………………………………..Full Article: Source

Africa: Commodities: The Trade Challenge

Posted on 06 August 2014 by VRS  |  Email |Print

With new rules and new markets, African companies are fighting for a bigger stake in the continent’s resource bonanza. At the same time, multinational traders like Glencore are targeting Africa as they seek to control commodity value chains.
For a couple of days in mid-June, as the rest of the world settled down to watch the World Cup, Chad made a rare foray into the global news headlines. Idris Déby Itno, its dapper deal-making president who had paid a call a month earlier at the Elysée Palace to see France’s President François Hollande, announced that Chad’s capital, N’Djamena, was going to be headquarters for the regional campaign against jihadists in Nigeria, Mali and beyond………………………………………..Full Article: Source

Middle East supply fears send oil prices higher

Posted on 06 August 2014 by VRS  |  Email |Print

Oil prices rose in Asia Tuesday on fresh fears of supply disruptions in the Middle East, analysts said. US benchmark West Texas Intermediate (WTI) for September delivery rose 10 cents to $98.39, while Brent crude for September gained 15 cents to $105.56 in afternoon trade.
“We haven’t seen signs so far that the ongoing conflicts in the Middle East could cause disruptions, but those concerns are still there at the back of investors’ minds,” Desmond Chua, market analyst at CMC Markets in Singapore, said. WTI on Monday snapped a five-day losing streak to gain 41 cents in New York trade following continued violence in crude producer Libya, where at least 22 more people died in Tripoli over the weekend………………………………………..Full Article: Source

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