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Commodities Briefing - Category | Trading more

Commodities strike six-year lows, set to enter new cycle

Posted on 28 August 2015 by VRS  |  Email |Print

Falling demand, rising production and faltering growth in the world’s second-largest economy China have sent many major commodities plummeting to their lowest level since 2009, with some experts predicting the start of a new cycle.
Oil prices this week dived to 6.5-year lows as commodities tumbled over concerns that China’s slowing economy will curb demand for metals and other vital raw materials which have helped feed its astonishing growth over the past three decades………………………………………..Full Article: Source

Could commodities make a real comeback soon?

Posted on 28 August 2015 by VRS  |  Email |Print

With oil prices surging after the global market turmoil of “Black Monday,” could investors regain their faith in commodities? If China fired enough stimulus into its economy, a longer-term bounce back in commodities could be on the horizon.
“We certainly think that the authorities in China have the firepower in terms of monetary and fiscal policy to enact enough stimulus for the economy to at least meet the growth rate they’re targeting,” Caroline Bain, senior commodities economist at Capital Economics, said………………………………………..Full Article: Source

Difference in London Gold Price AM and spot gold rate costs ‘unhedged’ bullion dealers

Posted on 27 August 2015 by VRS  |  Email |Print

For over a century, gold rates have been set twice daily — at 10:30 am and 3 pm — in London on the basis of which the metal is valued and traded throughout the world. On Tuesday, after the customary morning rate was set eyebrows were raised among a few bullion dealers at home and reportedly by some abroad.
The so-called London Gold Price AM which traders in India get to know at 3 PM, was $4.48 higher than the spot gold rate. This, according to the bullion dealers, resulted in losses for those who without hedging themselves made a delivery commitment to clients based on the lower spot rate, but had to pick up the gold by paying almost $5 more, based on the London Bullion Market Association (LBMA) morning rate………………………………………..Full Article: Source

China Remains a Key Commodities Player, Despite Waning Appetites

Posted on 26 August 2015 by VRS  |  Email |Print

The fear that China’s appetite for commodities, from copper to coal, is falling after a decade of breakneck growth has sent prices tumbling, but the country’s sheer scale in these markets means that China will continue to shape them in the long term, even if at a slower speed.
China now buys about an eighth of the world’s oil, a quarter of its gold, almost a third of its cotton and up to half of all the major base metals. Its buying power has made the country integral to global commodities trading, influencing everything from prices to the hours traders work. While analysts predict a slowdown in the growth of Chinese commodity demand, they believe the country’s clout in the market isn’t likely to wane………………………………………..Full Article: Source

Buy low, sell high…but stay away from commodities

Posted on 26 August 2015 by VRS  |  Email |Print

The global stock rout may have claimed some victims this week, with heavy selling sending the S&P 500 into correction territory, but equity markets can still offer returns for investors. The definition of “correction territory” is when you see a downward move from a recent high of 10 percent or more.
The definition of “bear market territory” is when you have a 20 percent move down over the course of at least 2 months. Down 17 percent since its recent high in April, the broad-based European Stoxx 600 index is now officially in “correction territory”……………………………………….Full Article: Source

Commodity Traders Feel Unusual Pain of a Market Rout

Posted on 26 August 2015 by VRS  |  Email |Print

For years, the secretive club of the world’s largest commodities traders thrived on volatility and sometimes tiny price differences in the raw materials they trade—styling themselves as nimble middlemen able to profit whether markets were rising or falling.
These days, many outfits are very different animals and that’s causing unusual pain amid today’s commodities-market rout. During a decade of booming commodities prices, many of these trading firms put billions of dollars into mines, pipelines and storage terminals. Those bets were supposed to help their traders understand supply and demand, while providing their trading floors with a ready source of supply………………………………………..Full Article: Source

Copper, Aluminum Close at Lowest Levels Since 2009

Posted on 25 August 2015 by VRS  |  Email |Print

Copper and aluminum futures closed at more-than-six-year lows in London on Monday, as a sharp decline in Chinese equities triggered a broad-based commodities rout over fears that the world’s biggest consumer of base metals is heading into a steeper-than-expected economic slowdown.
The London Metal Exchange’s three-month copper contract was down 2% at $4,953 a metric ton at the PM kerb close, having tumbled to its lowest level since 2009 earlier in trading at $4,855 a ton. It fell below the key $5,000 level for the fifth-straight session. Aluminum, meanwhile, closed down 1.7% at $1,521.50 a ton, after hitting a six-year low during trading at $1,506 a ton………………………………………..Full Article: Source

Commodity trading norms cleared by Sebi

Posted on 25 August 2015 by VRS  |  Email |Print

Setting September 28 as the date for merger of Forward Markets Commission (FMC) with itself, Sebi on Monday announced new norms for commodities derivatives market under which exchanges and brokers in this segment will need to comply with rules applicable to their stock market peers.
The new regulations will also come into force on September 28, the date from which Sebi would begin regulating the commodity derivatives market as a unified regulator. These norms, approved by Sebi’s board here on Monday, will enable functioning of the commodities derivatives market and its brokers under Sebi norms and integration of commodities derivatives and securities trading in an orderly manner………………………………………..Full Article: Source

Commodities Are Cheapest Since 2002, But Maybe Not Cheap Enough

Posted on 24 August 2015 by VRS  |  Email |Print

Here’s one more way to measure just how bad the commodity meltdown has gotten: compare the asset class to stocks. The Standard & Poor’s GSCI Index of 24 raw materials is now trading near its cheapest since 2002 compared with the S&P 500 Index of U.S. shares. But if you trust history for providing guidance, that’s still not low enough.
During the last big shift from commodity bull markets to bear markets, the ratio dropped even lower. After peaking in October 1980 amid supply shortages, producers responded to higher prices by boosting output. As gluts emerged, the ratio tumbled 96 percent to a record low of 0.1 in February 1999………………………………………..Full Article: Source

Wobbly global equities, commodities market may slow growth

Posted on 24 August 2015 by VRS  |  Email |Print

Global markets, which witnessed a sell off last week, may go to the extent of slowing global growth, analysts said, even as they sniff for investment opportunities. Global markets fell between 1-4 per cent last week, with the Dow Jones Industrial Average falling 500 points. Gold, however, recovered more than 10 per cent from its recent low on safe haven buying.
“The greatest near-term worry is that the fallout seen in the financial markets has a negative and reinforcing impact on global growth. The legacy of the turmoil in emerging markets is of course most likely to be lower growth in those economies,” said Gary Dugan, chief investment officer, at National Bank of Abu Dhabi………………………………………..Full Article: Source

Commodities Slide to Lowest in 16 Years as Oil Extends Collapse

Posted on 24 August 2015 by VRS  |  Email |Print

Commodities sank to the lowest level in 16 years as China’s economic slowdown exacerbates gluts of everything from oil to metals. The Bloomberg Commodity Index, which tracks 22 raw materials, lost as much 1.1 percent to 86.8556 points, the lowest intraday level since August 1999. The gauge, which was at 86.8620 points at 10:30 a.m. in Singapore, has dropped for the past four years.
Brent crude slid below $45 a barrel Monday for the first time since 2009 after Iran vowed to raise supply at any cost to defend market share. Raw materials are in retreat as supplies outstrip demand amid forecasts for the slowest Chinese growth since 1990. The largest user of energy, grains and metals was much weaker than anyone expected in the first half of the year, according to Ivan Glasenberg, head of commodity trader Glencore Plc………………………………………..Full Article: Source

The sell-off in commodities: Goodbye to all that

Posted on 21 August 2015 by VRS  |  Email |Print

A resurgent dollar has hammered commodity prices: many have recently fallen below their levels of a decade ago. That is a fate not shared by other tradeable assets: not since the late 1990s have commodity prices been so weak compared with shares.
The American economy is strengthening, but by no means enough to encourage thieves to filch bronze bells from Chinese temples to send as scrap to the United States. The impact of its recovery is dwarfed by slowing demand in China, which still consumes about half the world’s metals such as iron, aluminium, and zinc………………………………………..Full Article: Source

Gold Trading and the China Effect

Posted on 20 August 2015 by VRS  |  Email |Print

A higher interest rate scenario in the US also means that Gold may not be so attractive, as Bonds will start carrying higher coupons. Last week’s devaluation of the Yuan created a surge in Gold price over the following two days as investors turned to the shiny metal in search of a safe haven.
Since then the past 4 trading sessions has seen price remain within a fairly tight range between with most action between $1126.00 and $1110. China is the world’s number three market for Gold demand but the devaluation of its currency may have a negative effect in the longer run as Gold quoted in US Dollars becomes more expensive. Last Friday China’s biggest Gold Bullion ETF (exchange traded fund), Huaan Yifu Gold, reported a third consecutive outflow of funds………………………………………..Full Article: Source

What China’s currency devaluation means for the world’s trade deals

Posted on 20 August 2015 by VRS  |  Email |Print

With no international (or domestic) agreements on what constitutes currency manipulation, it’s time world leaders take action. With the sudden depreciation of China’s renminbi, it’s worth looking at the link between currency values and trade agreements. China’s currency last week dropped by a cumulative 4.4% against the U.S. dollar, making Chinese exports cheaper and imports into China more expensive by that amount.
The effect on trade can be substantial. With the U.S. average tariff on industrial goods well under 2%, this change in China’s currency value easily swamps most U.S. tariffs. And given the fact that the U.S. dollar was already strong, this move is an added disadvantage to U.S. exports headed for China compared to exports from other countries………………………………………..Full Article: Source

Oil and commodities crash hits AIM companies

Posted on 17 August 2015 by VRS  |  Email |Print

More than a tenth of the companies on the Alternative Investment Market are in the “90 per cent club”, having lost that proportion of their stock market worth since their peak, with much of the damage coming in the oil and gas and mining sectors.
These are disproportionately represented on AIM, as companies with promising assets but no production have used it to raise fresh capital. The collapse in the oil price and the fall in global commodities have undermined the value of those assets………………………………………..Full Article: Source

Agricultural commodities feel the bite of weaker demand

Posted on 13 August 2015 by VRS  |  Email |Print

A traders sound the death knell of the commodities supercycle, grains prices, which rallied on increased demand from emerging markets and periods of bad weather, also look to be heading for a period of weakness. Along with oil and metals, agricultural commodities rode the great bull run in raw materials from the early 2000s. On top of new demand from developing countries, biofuel mandates also contributed to supply shortages.
However, as growth slows in China and other emerging economies, agricultural and rural economies are facing a “reset downward” says Professor David Kohl, a US agricultural economist formerly of Virginia Tech………………………………………..Full Article: Source

Rumors of commodities’ demise are not being exaggerated

Posted on 11 August 2015 by VRS  |  Email |Print

Commodities are the gift that keep on not giving. The sector is in the throes of an ‘annus horribilis’, having gotten wrecked over the past few years despite massive liquidity that should have boosted their value. Bullish investor after bullish investor has tried to call a bottom, in a set of calls that now appear ill-conceived and money losing.
In the past week, the S&P GSCI Commodity Index has dropped 3.4 in the past week, as crude oil plunged 7 percent to hit multi-month lows, and a host of metals fell alongside it. That, of course, hardly marks the first big drop for the alternative investment group. That widely watched commodity index has fallen 17 percent the last three months, and a whopping 42 percent in the past two years. ……………………………………….Full Article: Source

China’s Exports Plunge - More Bad News For Commodities?

Posted on 10 August 2015 by VRS  |  Email |Print

China’s exports plunged 8.3% in July, far worse than expected, as China gets a taste of the other side of globalization – whereby a slow down in one area of the world spreads to another, in a vicious cycle of decline.
For years, China has been the largest beneficiary of globalization, riding a virtuous cycle of global growth in China’s three largest export markets – European Union, the US, and Japan. But with the EU floundering in the swamp of stagnation, caused by austerity; with the US barely growing under massive QE and with Japan trying to shake off two lost decades of economic growth, China’s export growth engine is running in reverse in all three regions………………………………………..Full Article: Source

Maybe the Commodities Supercycle Is Actually Real

Posted on 10 August 2015 by VRS  |  Email |Print

Economic supercycle theories, based on the long-ago musings of Nikolai Kondratiev and Joseph Schumpeter, have always been a little akin to voodoo: It’s hard to believe that there is an underlying pattern to how economic indicators change over the course of decades. The current rout in commodity prices, however, fits in eerily well with the idea.
Almost all commodity markets have taken a severe beating lately. The aggregate Bloomberg Commodities Index is down 61 percent from its 2008 peak and 46 percent from the 2011 post-crisis high:……………………………………….Full Article: Source

Traders Have Disappeared From the Gold Market

Posted on 07 August 2015 by VRS  |  Email |Print

As gold continues to languish near its lowest price in five years, one element seems to be missing: traders. Volume so far in August, already a slow time of year, has dropped about 8 percent from 2014. On Thursday, trading was about 40 percent below the 100-day average.
With fewer participants, the metal’s volatility has tumbled to the lowest in nine months. Gold traders are awaiting a U.S. jobs report due on Friday. A gain for employment could push the Federal Reserve to tighten monetary policy sooner, cutting the appeal of bullion because it doesn’t pay interest………………………………………..Full Article: Source

Global Oil Supply More Fragile Than You Think

Posted on 06 August 2015 by VRS  |  Email |Print

Many oil companies had trimmed their budgets heading into 2015 to deal with lower oil prices. But the rebound in April and May to $60 per barrel from the mid-$40s suggested that the severe drop was merely temporary.
But the collapse of prices in July – owing to the Iran nuclear deal, an ongoing production surplus, and economic and financial concerns in Greece and China – have darkened the mood. Now a prevailing sense that oil prices may stay lower for longer has hit the markets………………………………………..Full Article: Source

China concerns drive commodities lower

Posted on 04 August 2015 by VRS  |  Email |Print

Renewed concerns about the health of the Chinese economy helped drive industrial commodity prices down sharply while Treasury bond yields hit two-month lows after the release of weak manufacturing figures in the US. Equity headlines were dominated by a steep slide for the Greek market after it reopened following a five-week shutdown, although the rest of Europe paid little heed as earnings from the likes of Heineken and Commerzbank lifted the mood.
However, mining and energy stocks came under pressure as Brent oil fell back below the $50 a barrel mark — also hurt by worries about signs of increasing Opec output — and the price of copper touched a fresh six-year low in London………………………………………..Full Article: Source

Where to trade in commodities complex?

Posted on 03 August 2015 by VRS  |  Email |Print

In the backdrop of expectations of rising rates in the United States, precious metals have been on the backfoot, and so also is crude oil, which has been facing a supply overhang amid weak demand. However, experts feel that there still exist trading opportunities for traders and investors.
“We need to note that the word commodities’ goes beyond gold, silver and oil. There are industrial metals like copper, aluminium, zinc, lead, time and nickel and the entire gamut of agricultural commodities viz., soybean, corn, sugar, wheat, coffee, cocoa, etc that has much better potential,” Pradeep Unni, senior relationship manager, Richcomm Global Services told Gulf News. Even though there could be limited investment opportunities, but there could be good trading opportunities given the expectations of massive volatility………………………………………..Full Article: Source

CTAs lead hedge fund recovery as commodities slump

Posted on 29 July 2015 by VRS  |  Email |Print

Hedge funds are on track to deliver solid returns in July, up 1.4% month to date (0.4% of as end July 21). CTAs and global macro managers outperformed other hedge fund strategies, said Lyxor Asset Management.
In its Weekly Briefing, Lyxor said that CTAs bounced back last week, recouping part of the losses generated earlier this year. They benefited from their sizeable short positions in precious metals and energy as gold and energy prices dropped. Fixed income and equity buckets added to the gains, albeit to a lesser extent as CTA managers recently cut the risk on both asset classes………………………………………..Full Article: Source

Six collapsing commodities

Posted on 28 July 2015 by VRS  |  Email |Print

Commodity prices from gold to oil and aluminium to iron ore are tumbling – here are the big fallers. Just when investors thought it might be time for a summer lull, financial markets have shifted their focus from the eurozone and its Greek woes to tumbling commodity prices.
A combination of factors have knocked gold, crude oil and industrial metals such as copper in recent days. What commodities are on the move and what are they used for? Primarily used in jewellery and as a financial instrument, such as in the form of bars in central bank vaults, gold is also in demand from electronics companies and for medical uses such as dentistry………………………………………..Full Article: Source

Currency Trade Drops From Tokyo to New York on Fed’s Reserve

Posted on 28 July 2015 by VRS  |  Email |Print

Foreign-exchange trading declined around the world in April amid speculation the Federal Reserve will raise interest rates only gradually. Daily trading in the U.K., the largest currency market, fell 8 percent to average $2.5 trillion, down from October’s record of $2.7 trillion, according to a Monday statement from the Bank of England’s Foreign Exchange Joint Standing Committee.
In the U.S., volumes dropped about 20 percent from last October to $881 billion, the Foreign Exchange Committee, which is sponsored by the Federal Reserve Bank of New York, said on its website. “You saw monetary policy stagnation in all the major central banks at that period in time,” said Thomas Averill, a managing director in Sydney at Rochford Capital, a currency and rates risk-management company………………………………………..Full Article: Source

The negative feedback loop broadens the commodities sell-­off

Posted on 27 July 2015 by VRS  |  Email |Print

Goldman Sachs have been arguing since 2013 that commodities are caught in a “negative feedback loop between excess production capacity, US dollar appreciation and weaker EM economic growth”. They recently termed these three key themes the 3D’s of macro – deflation (excess production capacity and rising productivity), divergence (stronger US dollar and weaker EM currencies) and deleveraging (significant EM credit and macro imbalances).
“They are not only at the center of all of our views but have been a decade in the making and hence will likely take years to play out. Further, they are mutually self­-reinforcing. Lower commodity prices reinforce the US recovery and dollar appreciation; while weaker commodity currencies keep downward pressure on commodity cost curves (mainly through lower wage and energy costs),” say Goldman………………………………………..Full Article: Source

Commodities in a meltdown, but coal, uranium offer some hope

Posted on 27 July 2015 by VRS  |  Email |Print

From super-cycle to commodity meltdown was the way one group of analysts titled a report last week. “Sentiment toward commodities as an asset class has rarely, if ever, been more negative,” added Capital Economics.
Copper has hit a six-year low and closed on Friday at a dispiriting $US5238 a tonne, down 6 per cent on the week and with Goldman Sachs forecasting the red metal reaching $US4500/tonne by the end of 2016. Nickel took another hit, ending at $US11,255/tonne while lead shed more value to close at $US1716/tonne………………………………………..Full Article: Source

China’s rising commodity exports changing nature of trade: Russell

Posted on 24 July 2015 by VRS  |  Email |Print

The world is used to seeing China as an importer of raw materials and an exporter of manufactured goods, but a change is occurring that has global implications for commodities. While China is still the world’s biggest importer of commodities, the nature of its exports are changing.
The big growth in exports this year has been in semi-finished products, most of which fit into the broad definition of commodities. While not raw materials, these include steel, aluminium products and refined fuels. What is happening in China is that as the country has overbuilt capacity in heavy industries, it is now being forced by economics to seek export markets for intermediate commodities that had previously been consumed at home………………………………………..Full Article: Source

Gold Speculators Least Bullish on Record as Rate Rise Approaches

Posted on 20 July 2015 by VRS  |  Email |Print

Janet Yellen’s optimism about the U.S. economy is making gold speculators the least bullish on record. Money managers are holding the smallest net-bullish bet on gold since the U.S. government data begins in 2006. They’re also dumping silver, platinum and palladium, and combined net-long wagers across the metals are the lowest ever.
About $2.1 billion was erased from the value of exchange-traded products tracking the commodities last week, the most since March. Gold futures dropped to the lowest level since 2010 on Monday, and Barclays Plc recommends that investors short the metal and go long on the dollar. With Federal Reserve Chair Yellen repeating that she’s ready to raise U.S. interest rates this year, investors are dumping precious metals that don’t pay interest or offer returns like competing assets………………………………………..Full Article: Source

Which regulations are commodity traders happy with?

Posted on 20 July 2015 by VRS  |  Email |Print

As home to some of the largest commodities trading companies in the world, Switzerland is taking steps to bring legislation more in line with major business partners. While recently adopted measures are seemingly welcomed by the industry, other more stringent steps are being considered with slightly more trepidation.
For Stéphane Graber, secretary general of the STSA (Swiss Trading and Shipping Association), Parliament’s adoption of the Financial Market Infrastructure Act was essential for the industry he represents. The legislation, which governs the organisation and operation of financial markets, aims to align Switzerland to regulations, particularly in the United States and the European Union, to control manipulations of large trades………………………………………..Full Article: Source

Currency-trading boost helps Icap

Posted on 16 July 2015 by VRS  |  Email |Print

The end of a dull spell in currencies is helping broker Icap, but the company is still holding out for more clarity on the path of US interest rates. In a trading statement covering April to June released on Wednesday, the London-based broker said its average daily volumes in currencies trading, through its EBS system, were up by 34 per cent to $98bn.
That’s still far behind EBS’s heyday, but still marks a recovery from historic lows. Non-deliverable currencies forwards and the offshore-traded renminbi showed particularly strong growth, it said………………………………………..Full Article: Source

Currency Trading Shifts to Multi-Dealer Systems, Greenwich Says

Posted on 15 July 2015 by VRS  |  Email |Print

Currency investors are increasingly using electronic systems connected to multiple dealers as the market comes under greater scrutiny by regulators, according to Greenwich Associates.
Institutional investors and large corporations executed 49 percent of their foreign-exchange trading volumes on multi-dealer platforms last year, up from 45 percent in 2013 and 38 percent in 2008, the Stamford, Connecticut-based consultant said in a report. The increase comes as trading by traditional methods, such as phone, instant messaging and single-dealer platforms, has fallen………………………………………..Full Article: Source

Commodity market rout shows how Chinese growth determines prices

Posted on 14 July 2015 by VRS  |  Email |Print

The recent global rout in commodity markets re-emphasised the relationship between Chinese growth and commodity prices. It is a well-known fact that China is the largest importer and consumer of many commodities, but its commodity traders are also among the most leveraged.
The Chinese manufacturing boom started a couple of decades ago serving the needs of the western world for cheaper manufacturing. But over the last decade much of its growth has been supported by the rise in domestic consumption driven by the vast middle-class on the back of rising incomes and asset prices………………………………………..Full Article: Source

Low prices to boost some China commodities imports

Posted on 14 July 2015 by VRS  |  Email |Print

Prices near multi-year lows could support some Chinese commodity imports in coming months, giving a boost to crude oil, iron ore and soybean shipments, but weak domestic demand is expected to keep other commodities in check. China’s crude oil imports surged 27 percent in June on a year earlier to the second highest level on record.
Soybeans imports had a similar jump as buyers took advantage of cheap and plentiful overseas supplies. “Given the very low commodity prices, I think there will be some restocking demand and that will support the import of commodities,” said Helen Lau, analyst at Argonaut Securities in Hong Kong………………………………………..Full Article: Source

Commodities continue to see volatility, China scare persists

Posted on 09 July 2015 by VRS  |  Email |Print

The global commodity market witnessed sharp volatility on Wednesday after tumbling in early trade due to concerns that a persistent slide in China’s stock market may have broader damaging impact on other markets as well.
Earlier in the day, the Bloomberg Commodity Index, which tracks the prices of 22 commodities (from oil to natural gas), dropped as much as 0.8% to 96.8069, its lowest level on a closing basis since late 2001 and slightly over an intraday low of 96.258 on March 18………………………………………..Full Article: Source

China sees surge in precious metal trading

Posted on 08 July 2015 by VRS  |  Email |Print

China recently saw trades of precious metals hit new highs and several companies introduced new investment products that are more accessible to average investors, according to the Guangzhou Daily. The Shanghai Gold Exchange (SGE) posted a record trading volume of 48.33 million grams in a single day in late June, even though global gold prices remain bearish, the paper said.
In early July, gold was still hovering around the three and a half month low of US$1,168 per ounce on uncertainty created by the Greek debt crisis. Several precious metals trading platforms in China have also witnessed a rebound and record trading volumes since mid-May, the newspaper reported. The Guangdong Precious Metals Exchange said the number of institutional investors more than tripled from a year earlier, while trading volume in June nearly doubled from last year………………………………………..Full Article: Source

Commodities Skid on China’s Stock Rout

Posted on 07 July 2015 by VRS  |  Email |Print

Commodities suffered their worst rout in seven months as a steep selloff in China’s stock market magnified investor fears about weaker demand from one of the world’s largest consumers of raw materials.
The S&P GSCI, an index that tracks a diversified basket of commodities, fell 4.9% to 412.51 Monday. This was its steepest drop since November and its lowest level since April. The losses come amid a swift downdraft in Chinese stocks, which have lost more than one-quarter of their value since touching a record high in June and gave up 72% of all their gains made this year………………………………………..Full Article: Source

Iran Wants to Double Oil Exports After Sanctions Lifted

Posted on 06 July 2015 by VRS  |  Email |Print

Iran wants to double its crude exports soon after sanctions are lifted and is pushing other members of the Organization of the Petroleum Exporting Countries to renew the cartel’s quota system, a top Iranian official said. Both developments could set up a clash with Saudi Arabia, which is scrambling to raise its own export numbers and has opposed the return of production limits on individual OPEC members.
Iran’s efforts underscore how the country’s full return to the export market would upend the status quo among leading producers if Tehran clinches a deal with six world powers that would lift sanctions in exchange for curbs on its nuclear activities………………………………………..Full Article: Source

Commodities Break Their Ties

Posted on 02 July 2015 by VRS  |  Email |Print

Tumbling oil prices and a historic rally in the U.S. dollar had commodity markets marching in lock step for months, but they broke ranks in the second quarter. Oil prices, which touched six-year lows in March, gained 24.9% in the second quarter on expectations of slowing supplies and higher demand.
Meanwhile, the dollar pulled back from 12-year highs as investors pushed back their forecasts for higher interest rates in the U.S. “This has helped commodities become independent and dispersed once again,” said Michael Haigh, global head of commodities research at Société Générale………………………………………..Full Article: Source

OPEC oil output hits three-year high in June on Iraq: Reuters survey

Posted on 02 July 2015 by VRS  |  Email |Print

OPEC oil supply in June has climbed to a three-year high due to record or near-record output from Iraq and Saudi Arabia, a Reuters survey found, underlining the focus of the group’s top exporters on market share.
The boost from the Organization of the Petroleum Exporting Countries puts output further above its target of 30 million barrels per day (bpd) and comes despite outages in Libya and Nigeria that curbed supplies. OPEC supply has risen in June to 31.60 million bpd from a revised 31.30 million bpd in May, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants………………………………………..Full Article: Source

India: Algorithmic trading in domestic commodities sees sharp spike

Posted on 02 July 2015 by VRS  |  Email |Print

The share of trading based on algorithms, or algo trading in popular parlance, has seen a sharp rise in domestic commodity markets, amid regulatory concerns on the volatility that such trading can bring to the markets.
Software codes or algorithms are frequently used to automate and enhance order-matching processes. While such trading has been popular in the equities segment for some time now, it has picked up relatively recently in the commodities market………………………………………..Full Article: Source

Commodities Jump Most Since February as Corn, Soybeans Rally

Posted on 01 July 2015 by VRS  |  Email |Print

The outlook for smaller crop supplies sent corn and soybean prices surging, spurring the biggest gain for raw-material prices since February. The Bloomberg Commodity Index of 22 components rose 1.9 percent to 102.69 as of 3:30 p.m. in New York, on pace for the largest advance since Feb. 3. Corn soared the most since 2010, climbing 7.7 percent, the biggest gain among the asset class on Tuesday.
Heavy rains have slowed crop planting across the U.S. Midwest, while expanding livestock herds mean that there’s more grain being used in feed supplies. American farmers planted fewer corn acres than estimated three months ago, and domestic inventories as of June 1 were smaller than analysts were forecasting, a report from the U.S. Department of Agriculture showed Tuesday………………………………………..Full Article: Source

Commodities Green Shoots Suggest Better H2 - Analysts

Posted on 01 July 2015 by VRS  |  Email |Print

Commodity prices have been largely flatlined in the past few months, and even on the year, would appear to be on life-support. Nevertheless, analysts see scope for commodity recovery in the second half of 2015 and point to several factors that could revive global investor interest.
The Thomson Reuters Jefferies CRB index stands at 227.2176 Tuesday afternoon, on the high side of a 223.1627 to 226.4730 range. The TRJCRB closed at 229.9579 December 31, and fell to 211.2690 January 29, covered to 229.5511 in mid February and then put in a 2015 trough of 206.8126 on March 18, the day the Fed took the word “patient” from the accompanying statement………………………………………..Full Article: Source

Oil uptrend breakout

Posted on 01 July 2015 by VRS  |  Email |Print

The NYMEX oil price remains bullish and could be headed for $63, technical analysis shows. It’s developed a double bottom pattern near $45 as the downtrend consolidation developed. When the height of the double bottom is measured, this value is projected above the peak of the double bottom pattern near $53. This pattern is also called a W trend reversal pattern.
The upside target for the double bottom rebound is near $63. This target has not been achieved as the price has consolidated between $58 and $61. But this remains a bullish chart pattern because support at $58 is consistent. The consolidation behavior is a pause in the full development of the double bottom pattern so the $63 target remains achievable………………………………………..Full Article: Source

Commodities Drop as Greek Turmoil Spurs Concern Demand Will Wane

Posted on 30 June 2015 by VRS  |  Email |Print

Commodities fell the most in a week on concern that Greece’s deepening financial crisis will threaten global economic growth and demand for energy and metals. The Bloomberg Commodity Index of 22 raw materials lost as much as 0.9 percent, the most since June 19. Energy products and industrial metals led declines, with crude oil dropping to a three-week low and nickel slumping to the lowest since 2009.
Greece shut its banks and imposed capital controls in a bid to avert the collapse of its financial system, increasing the risk that it will be forced out of the euro. After failing to reach a deal with creditors, the country will vote in a July 5 referendum on proposals needed to restore bailout aid………………………………………..Full Article: Source

Greece and China weigh on commodities

Posted on 30 June 2015 by VRS  |  Email |Print

Commodities did not escape the market turmoil caused by Greece’s capital controls and a hefty drop in Chinese equities, with the stronger dollar and risk aversion hitting raw materials led by oil and metals. ICE August Brent, the international benchmark that has traded within a tight range of $61-$66 a barrel for several weeks, fell $1.41 a barrel to $61.86. In the US, Nymex August West Texas Intermediate fell $1.23 a barrel to $58.40.
On the London Metal Exchange, amid a sea of red for industrial metals prices, nickel plumbed a six-year low. The metal, an ingredient for stainless steel, fell 4.6 per cent to $11,855 a tonne, while aluminium was off 1.5 per cent, copper fell 0.5 per cent, and tin dropped 2.5 per cent………………………………………..Full Article: Source

Baltic Exchange ship futures platform examines move into commodities

Posted on 30 June 2015 by VRS  |  Email |Print

London’s Baltic Exchange is studying a potential foray into commodities and is open to proposals on tie-ups as other exchanges attempt to boost volumes, its chief executive said. Baltex, the Baltic’s digital shipping platform, was launched in 2011 as the first central electronic marketplace for freight forward agreements (FFAs), which allow investors to take positions on freight rates at a point in the future.
Since the beginning of this year, the previously loss making platform, has reached break even levels after Baltex became a venue for presenting block futures at the start of December………………………………………..Full Article: Source

Water: The Next Tradable Commodity?

Posted on 30 June 2015 by VRS  |  Email |Print

Water will one day be soon traded as a commodity. Setup in 2003 as an unmanaged benchmark, the Palisades Water Index is tracked by many water indexes and ETFs. As the popular rhyme goes: “Water, water everywhere, but not a drop to drink” tweet.
Public perception has begun to change regarding water no longer being an infinite resource as we previously thought. Despite it covering 68% of the surface of the planet, the amount that actually serves a purpose for humans is only a mere 0.3%. With what some perceive as an “epidemic” expanding globally, experts predict that the only sustainable way in managing water is to trade it on a futures exchange, similar to other natural commodities such as oil and gold………………………………………..Full Article: Source

Saudi Kingdom, Russia vie for global oil market foothold

Posted on 29 June 2015 by VRS  |  Email |Print

In the rapidly changing geopolitical environment, Saudi Arabia and Russia are forging ahead - fostering a closer relationship - in major sectors including the all important energy sector. When the Saudi Deputy Crown prince Mohammad bin Salman, accompanied not only by the Foreign Minister Adel bin Jubeir but also the Petroleum Minister Ali Al-Naimi called on Russian President Vladimir Putin in St. Petersburg on June 18, six major deals were signed between the world’s two top crude producers.
The deals ranged from agreement in defense sector to enhanced cooperation in energy development. It also covered greater cooperation on nuclear energy development. Citing unnamed sources, Al-Arabiya reported the kingdom planned to build 16 nuclear reactors and Russia has agreed to play a significant role in operating them………………………………………..Full Article: Source

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