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Commodities Briefing - Category | Trading more

Regulator plays down impact of rules shake-up on gas traders

Posted on 27 February 2015 by VRS  |  Email |Print

Fewer than four natural gas traders hold positions big enough to breach broad new limits on speculation in the US, a regulator said in comments that played down the impact of a controversial rule proposal.
The disclosure came as the US Commodity Futures Trading Commission held its latest meeting to ponder its proposed “position limits” rule for commodities that would cap the number of futures contracts held by any single trader………………………………………..Full Article: Source

China’s new Shanghai-Hong Kong gold link-up hope to rival Western competition

Posted on 27 February 2015 by VRS  |  Email |Print

China is set to launch a link between gold markets in Shanghai and Hong Kong this year following a landmark stock connect scheme, aiming to enhance its pricing power of gold contracts and ultimately challenge its competitors in the West.
While China is the world’s largest consumer of the precious metal, having surpassed India, daily trading of gold in financial centre Shanghai is small compared with London. The move to develop gold trading comes as more trade flows to Asia and is in line with Beijing’s efforts to open up its domestic markets to foreign investors. China wants more market players to use its yuan currency when settling trade contracts and for making investments………………………………………..Full Article: Source

How Do Commodity Suppliers Go Sustainable?

Posted on 26 February 2015 by VRS  |  Email |Print

Social and environmental responsibilities are rarely at the top of mind when suppliers are racing to the bottom of the price curve. That’s why sustainability is hard to come by in commodity industries. But a small giant in New Zealand is changing all that, at least when it comes to wool.
Dave Maslen is global partnership and sustainability manager at the New Zealand Merino Co. (NZM). In this video interview (after the jump), he shares the story of how Merino brings traceable, sustainably-produced wool to market by working directly with farmers and the value chain………………………………………..Full Article: Source

Gold trade coming back, if you can wait 2 years: BofA

Posted on 26 February 2015 by VRS  |  Email |Print

Gold will come under further pressure over the course of the year as the Federal Reserve moves closer to lifting rates, but prospects for the precious metal looks far more promising in the next few years, according to Bank of America Merrill Lynch.
“Right now, investors are not in the mood for holding gold because they see the Fed raising rates. So, I think in the next three months you’ll see downside risk, $1,100 an ounce is likely,” Francisco Blanch, commodities analyst at Bank of America Merrill Lynch told CNBC. “But if you look out 2-3 years, things are a lot brighter for gold,” he said………………………………………..Full Article: Source

How can options trading gain ground in commodities ?

Posted on 24 February 2015 by VRS  |  Email |Print

The commodities futures market underwent changes in 2003 with many policy reversals. But option-based derivatives are yet to gain ground in commodities. Though the Forward Contract (Regulation) Bill, 2010, has provisions for option trading, its execution requires considerable attention from the regulator, commodity exchanges and market participants.
The government can replace the price support scheme with minimum guaranteed price (MGP). Policy makers are passive on the adoption of option-based trading despite the benefits. Option can be over-the-counter and exchange-traded. Similar to the futures, option requires at least two parties to exercise the contract. Exchange-traded option can help to mitigate counter-party credit risk as the contract will be more standardised in nature………………………………………..Full Article: Source

India’s gold imports set to rise as RBI eases curbs ahead of budget

Posted on 20 February 2015 by VRS  |  Email |Print

Gold imports to top consumer India are set to jump in coming months after the Reserve Bank of India (RBI) eased gold import curbs, ahead of an expected cut in import duty in next week’s budget.
The Reserve Bank of India said on Wednesday banks would again be allowed to import gold on a “consignment basis”, under which they act as intermediaries and don’t pay for the stock until a buyer has been found, which is usually quickly. Trading houses will be allowed to bring in gold with no conditions attached………………………………………..Full Article: Source

India: Banks allowed to import gold on consignment basis

Posted on 19 February 2015 by VRS  |  Email |Print

The Reserve Bank of India (RBI) on Wednesday said nominated banks were now permitted to import gold on consignment basis. “All sale of gold domestically will, however, be against upfront payments,” said the RBI, adding, “Banks are free to grant gold metal loans.”
In a notification to banks, the central bank also said that Star and Premier Trading Houses can “import gold on documents against payment basis as per entitlement without any end use restrictions. While the import of gold coins and medallions will no longer be prohibited, pending further review, the restrictions on banks in selling gold coins and medallions are not being removed, it added………………………………………..Full Article: Source

RBA Cut as China Commodity, Local Consumption Doubts Remain

Posted on 18 February 2015 by VRS  |  Email |Print

The Reserve Bank of Australia said doubts about a pickup in domestic spending and China’s appetite for raw materials prompted this month’s decision to lower interest rates, and reiterated that the Aussie dollar remains too high.
“There was considerable uncertainty around the timing and extent of the expected increase in household consumption growth and non-mining business investment,” it said in minutes of the first meeting of the year, where it debated whether to cut straight away or wait a month. There was also a lack of clarity on “the outlook for the Chinese property market and its implications for Chinese demand for commodities,” it said………………………………………..Full Article: Source

Oil traders celebrate market rout

Posted on 17 February 2015 by VRS  |  Email |Print

For some the lavish party thrown by Socar, the state oil company of Azerbaijan, during International Petroleum Week, was a chance to drown their sorrows and forget about the market. But for others enjoying the hospitality at the Grosvenor House Hotel on London’s Park Lane there were reasons to celebrate.
After several years of flat markets, falling profits and declining margins, oil traders are enjoying the most favourable trading conditions they have seen since the global financial crisis in 2008. For the big players such as Glencore, Gunvor, Mercuria, Trafigura and Vitol, which source, store and transport crude oil and related products, the market rout may be a boon………………………………………..Full Article: Source

Rising Oil Lifts All (Commodity) Boats

Posted on 13 February 2015 by VRS  |  Email |Print

In the commodity markets, a rising price of oil lifts all boats. The 24 commodities in the S&P GSCI index aren’t directly correlated with oil prices, as each raw material moves on its own supply-and-demand dynamics.
But new data from S&P Dow Jones Indices show that when U.S. oil prices are up, it’s hard for other commodities to be down – and vice versa. On average, when oil is up in a month, the index’s 23 other commodities have positive months too, according to an analysis by Jodie Gunzberg, global head of commodities at S&P Dow Jones Indices. When oil is down, 21 other commodities also have down months, on average………………………………………..Full Article: Source

Deutsche Börse connects commodities traders with new platform

Posted on 11 February 2015 by VRS  |  Email |Print

Deutsche Börse has signed a trio of commodities trading entities to use its new M7 trading platform, developed as part of a complete renewal of its trading infrastructure.
Singapore-based regulated futures exchange Cleartrade Exchange, London-based Freight Investor Services Ltd., a broker of freight and commodity derivatives, and Norexeco ASA, a commodities exchange for pulp and paper based in Norway, will start to use M7 in the next few months………………………………………..Full Article: Source

Commodities Are Down—but Hardly Out

Posted on 10 February 2015 by VRS  |  Email |Print

Do commodities still have a place in the average investor’s portfolio? The 2007-09 recession caused everyone to re-evaluate their tolerance for risk, and nowhere was this felt more strongly than in the commodities arena, where anything from a coffee-eating pest to severe drought could cost an investor hundreds of thousands of dollars.
Several years of negative returns for most commodities haven’t endeared the asset class to investors: For the three years through January, the S&P GSCI Commodity Index posted a negative return of 40%. That came after a 52% decline between June 2008 and June 2011………………………………………..Full Article: Source

Tempted by fall in global commodities? Here’s how to trade commodity-based funds

Posted on 10 February 2015 by VRS  |  Email |Print

It’s difficult days for those investors who bet on the global commodities theme. The DSP Blackrock World Mining Fund crashed 24 per cent over the last one year. Its annualised loss for the 2 and 3 year holding period is also placed at 18 per cent and 14 per cent respectively. The country-specific funds, catering to resource-rich nations, have also been affected by the crash in commodity prices.
For example, the annualised losses for 1, 2 and 3 years holding period for HSBC Brazil Fund is 15 cent, 16 per cent and 11 per cent respectively. Here too, the NAV of the growth option is below par. What should investors do with these funds now? Should existing investors book losses and move out or should they hold on to them, hoping for a recovery………………………………………..Full Article: Source

China trade data shows impact of commodity price slump

Posted on 10 February 2015 by VRS  |  Email |Print

China’s January trade data has been viewed as unambiguously weak, and while the softer exports are an obvious concern, the dramatic slump in imports isn’t nearly as bad as it looks.
Exports dropped 3.3 percent from a year earlier, against a median expectation of a 6.3 percent gain, while imports plummeted 19.9 percent, the biggest slide since May 2009, a time when the economy was dealing with the global recession. The problem with looking at the trade numbers in percentage terms is that they are dollar-based, value numbers………………………………………..Full Article: Source

China’s commodity imports slow in January after record December

Posted on 09 February 2015 by VRS  |  Email |Print

China’s imports of key commodities eased in January after the record high set in December, as expected as the earlier heavy purchases to take advantage of weak prices had swollen inventories, preliminary customs data released on Sunday showed.
China’s slowing economy - 7.4 percent growth in 2014 was the weakest in 24 years - has weighed on global markets as it is the world’s biggest buyer of iron ore, coal, copper and soy, and the second-largest crude oil importer after the United States. The sharp falls in commodity imports helped result n a record monthly trade surplus of $60 billion………………………………………..Full Article: Source

China’s SGE January gold withdrawals record 255 tonnes

Posted on 09 February 2015 by VRS  |  Email |Print

With another 53.7 tonnes of gold withdrawn from the SGE in the final week of January, Chinese gold demand appears to match almost exactly total global new mined gold supply. Global new mined gold supply approximately 3,100 tonnes a year or averaging 258 tonnes/month: Shanghai Gold Exchange (SGE) gold withdrawals in January 255 tonnes! The figures speak for themselves.
Forget GFMS China gold consumption figures, we just don’t believe they are even close to reality. Forget the latest Reuters report on Chinese gold demand published here on Mineweb on Friday – it just quoted the same figures although it attributed them to another source………………………………………..Full Article: Source

China’s Copper Ore Imports Slide After Record Smelter Production

Posted on 09 February 2015 by VRS  |  Email |Print

China’s imports of copper ore and concentrate, used to make the refined metal, fell for the first time in three months after smelters in the world’s largest consumer boosted production to a record last year.
Inbound shipments in January fell to 930,000 metric tons, down 20 percent from the previous month, according to General Administration of Customs data released Sunday in Beijing………………………………………..Full Article: Source

Oil spikes in ‘super volatile’ market amid supply gain

Posted on 06 February 2015 by VRS  |  Email |Print

Oil traded at the greatest volatility since April 2009 after U.S. crude supplies rose from the highest level in more than three decades. West Texas Intermediate gained as much as 7.5%, erasing an earlier 2.3% decline. Prices have moved an average of US$1.74 a day this year, up from 92 cents during the first 24 days of 2014.
Crude inventories expanded by 6.33 million barrels to 413.1 million last week, the highest level in weekly records compiled since August 1982, the Energy Information Administration reported Wednesday. Oil’s swings have intensified since the Organization of Petroleum Exporting Countries decided in November to let rival producers deal with a global surplus that Iran’s oil minister pegged at 2 million barrels a day in an interview with state television………………………………………..Full Article: Source

Commodities, Geneva and the Swiss franc

Posted on 30 January 2015 by VRS  |  Email |Print

Bunge, the international agricultural trader, is closing its sugar and ethanol operations in London and moving them to Geneva, the home of its grain trading hub. Its decision is counterintuitive, especially at a time when the jump in the currency after the Swiss ditched their franc cap has pushed.
Bunge says the move will “improve efficiency and further integrate with our core trading businesses”, and there are worse places in the world to work. Commodities traders have a long history in Switzerland, especially in Geneva. Easy access to finance, low taxes and relatively light regulation have made it a good place to do business………………………………………..Full Article: Source

Who will clean up global commerce?

Posted on 30 January 2015 by VRS  |  Email |Print

Few play the system better than big business. Whether it’s getting the lowest prices from suppliers, convincing us to buy their stuff or keeping the taxman at bay, corporations reign supreme. But what happens when the system starts playing them? Corporate capitalism is getting closer and closer to finding out.
By putting profits first and the planet second (at best), businesses are helping accelerate many of the most concerning “megatrends” of our age. Corporations might not be overly concerned about climate change, resource scarcity, food insecurity and so on today, but you can bet they will be tomorrow when these planetary problems set their profits plummeting………………………………………..Full Article: Source

Why Hasn’t Silver Completely Broken Out?

Posted on 28 January 2015 by VRS  |  Email |Print

Whenever central banks engage in stimulus schemes that flood financial markets with cheap liquidity, attention almost always turns to investments that can store value. Obviously, when a central bank works to actively devalue its currency, it is a good idea to start shoring up, or preserving the value of a currency by tying it to a commodity.
Gold and silver are the natural safe havens of investors who are spooked by the prospect of cheap liquidity. This is exactly what played out with the recent appreciation in gold and silver prices. However, silver prices may not hold up that well over the midterm. Why? Silver is both an investment commodity and an industrial commodity. In fact, there is still a lot of silver being produced every year for industrial purposes………………………………………..Full Article: Source

Will Global Commodities Reverse the Crunch of 2014 Final Quarter?

Posted on 27 January 2015 by VRS  |  Email |Print

In analyzing the global fourth quarter crash of the commodity markets, it has become quite obvious that the bulk of the un-natural depth of the slump was caused by a desperate attempt by Saudi Arabia to undercut the incredible growth of America’s hydraulic fracturing, which had added a million barrels a day throughout 2014.
While $100 per barrel had become a stable target for most of 2013 and the first eight months of 2014, the sudden crash right after Labor Day was no coincidence. Although a $30 per barrel low of crude oil for both foreign Brent crude and domestic West Texas Intermediate (WTI) had been expected in the depths of the great financial recession in March 2009, this was a far cry from the relatively moderate supply/demand imbalance that ostensibly caused the “halving” of oil prices in 2014’s last four months………………………………………..Full Article: Source

Commodities, Currency Commotion Brings Volatility

Posted on 21 January 2015 by VRS  |  Email |Print

Traders return from a long holiday weekend already riding a slippery slope of volatility greased by international events and uncertainty heading into the depths of earnings season. In fact, volatility is higher across many asset classes.
For starters, the CBOE Volatility Index (VIX), which tracks the implied volatility priced into S&P 500 Index (SPX) options, hit a three-week high of 23.43 Friday as the SPX was at risk of a six-day losing skid. But true to Freaky Friday form, the broader market rebounded late in the day. SPX support now lies at 2000, with resistance hovering at 2022………………………………………..Full Article: Source

China funds become new force in global commodity trade

Posted on 21 January 2015 by VRS  |  Email |Print

China’s Shanghai Chaos investment fund is named after the pioneer of chaos theory Edward Norton Lorenz, who coined the term “butterfly effect” to describe seemingly random yet connected events. That may be an apt description for the global metals markets, where moves made by hedge funds in China are increasingly felt across the globe.
“Over 40 years ago US meteorologist Edward Lorenz definitely could not have known that his theories would change a Chinese person’s investment ideas, and allow him to make money,” Shanghai Chaos founder Ge Weidong said in a 2009 interview with Chinese media, explaining why he chose the name of his fund………………………………………..Full Article: Source

Why commodity exporters may get a tailwind

Posted on 19 January 2015 by VRS  |  Email |Print

Conventional wisdom suggests commodity exporters will take price declines on the chin, but Morgan Stanley expects they’ll benefit most. It’s all about curing the Dutch Disease, Morgan Stanley said in a note last week, referring to the negative economic impact of increasing natural resources investment at the expense of other sectors.
“If left uncured, the net effect is usually a decline in productivity that tends to hurt growth over longer periods,” the bank said. “Commodity exporters face a difficult transition, some a recession, and even after that, a few could lapse back into mediocre growth and low productivity,” it said………………………………………..Full Article: Source

Warning: China may trigger fresh rout in commodities

Posted on 16 January 2015 by VRS  |  Email |Print

Commodities just can’t catch a break – and China’s upcoming gross domestic product (GDP) release on January 20 could throw another punch at the beleaguered asset class should it underperform expectations, warn analysts.
“We are days from the release of China’s Q4 GDP and copper is the best barometer of growth. The rout gives me reason to believe China’s growth is not only moderating but is slowing faster than estimated,” Evan Lucas, market strategist at IG wrote in a note. “If China disappoints next Tuesday, brace for a real rout in commodities,” he said………………………………………..Full Article: Source

Commodities traders’ costs soar with Swiss franc’s leap

Posted on 16 January 2015 by VRS  |  Email |Print

A dramatic rise in the value of the Swiss franc sent costs soaring for the country’s commodity trading houses on Thursday, adding to pressures from tax and regulatory uncertainty that has already pushed many abroad.
The Swiss National Bank shocked financial markets on Thursday by scrapping a three-year-old cap on the franc, sending the safe-haven currency soaring against the euro and stocks plunging………………………………………..Full Article: Source

Commodities Sink To 12-Year Low as Copper, Oil Slump

Posted on 15 January 2015 by VRS  |  Email |Print

Commodities slumped to a 12-year low, led by the biggest plunge in copper since 2011, after a report from the World Bank fanned concerns of a global economic slowdown.
Copper futures for March delivery tumbled five percent to $2.5125 a pound as of 11:45 a.m. in New York, set for a fourth day of losses. Nickel erased more than 2 percent, while oil reversed earlier declines, with West Texas Intermediate trading little changed at $45.88 a barrel……………………………………….Full Article: Source

China Commodity Imports Surge on Low Prices

Posted on 14 January 2015 by VRS  |  Email |Print

China imported record volumes of commodities last year, taking advantage of lower prices to maintain its position as a massive buyer of global resources despite a slowdown in its broader economy.
Import volumes of iron ore, crude oil, copper and soybeans hit an all-time-high in 2014, according to official data released Tuesday. Imports of iron ore, crude oil and soybeans for the month of December alone also reached record volumes in a late-year surge of shipments………………………………………..Full Article: Source

Why the extremes in the commodities complex?

Posted on 14 January 2015 by VRS  |  Email |Print

Another morning of extremes, at least in the Treasury and commodity complexes. 10-year bond yields are at 18-month lows. Gold touched a 12-week high. Oil plumbed a nearly 6-year low. Copper is down another 2.5 percent at a 5.5-year low, with similar weakness in Nickel and Zinc. Aluminum has also fallen 1.4 percent.
The drop in copper comes despite good news out of China, where December exports rose 9.7 percent year over year and imports contracted 2.4 percent, both better than expected. However, total Chinese trade increased only 3.4 percent in 2014, well short of the 7.5 percent goal. China should release its annual GDP figure for 2014 next week………………………………………..Full Article: Source

OPEC price war in Asia intensifies as oil falls below $50

Posted on 13 January 2015 by VRS  |  Email |Print

Even as Saudi Arabia and its Gulf OPEC allies appear united in their refusal to cut output to boost global oil prices, they are becoming locked in an increasingly fierce battle to secure market share in Asia.
Oil prices have slumped below $50 a barrel, the weakest since 2009, triggering a price war between producers to secure customers in Asia. And the price outlook remains grim with Goldman Sachs slashing its three-month benchmark crude forecasts to just above $40………………………………………..Full Article: Source

Commodities may trade flat in 2015, steady upturn in 2016: SMC Global

Posted on 12 January 2015 by VRS  |  Email |Print

Commodities are expected to trade flat in 2015 but in 2016 it should take slow but steady upturn on expected positive growth in world economy, according to an annual report by SMC Global. In the coming days, deflation is the bigger global risk. Though the latest fall in commodities curb the import bill of many countries, any further growth in economy may assist commodities to build base at current levels, the report said.
IMF has forecast for 2015 global growth to 3.2%. As regards, U.S is expected to rise from 2% GDP growth in 2014 to 3.2% by 2016, while the Eurozone is expected to stabilize at 1% growth in 2015 and 2016. Japan’s GDP is forecast to rise to 1.6% growth by 2016, while India is expected to post a rapid pickup, to 7.7% by 2016………………………………………..Full Article: Source

Demoralized oil traders give up betting on how low prices can go

Posted on 09 January 2015 by VRS  |  Email |Print

Crude oil’s freefall from $100 a barrel to under $50 has struck at the heart of a core belief in the markets: that Saudi Arabia would always ride to the rescue. Oil traders can agree on only one thing about when the second-biggest price rout on record will be over: not yet.
Crude oil’s freefall from more than $100 a barrel last summer to a near six-year low under $50 a barrel has been unrelenting, shocking traders and baffling analysts who have all but given up trying to pinpoint the bottom of the market. The scale of the uncertainty reflects a market stripped of a core belief that has underpinned prices for the past decade: that top oil exporter Saudi Arabia would always ride to the rescue………………………………………..Full Article: Source

How to make futures trading in commodities buoyant

Posted on 08 January 2015 by VRS  |  Email |Print

Futures trading in India has seen a structural improvisation in the recent past. The commodity exchanges performance and the way they conduct trading indicate the development of the futures markets in general. Yet, they have not attracted significant participation.
While the futures market is expected to be instrumental in price discovery and risk management, there still debate on its utility among policy makers. The Forward Markets Commission (FMC) regulates the commodity markets; the exchanges act as demutualised self-regulatory organisations and they have adjunct clearinghouses for settlements and clearing the trade………………………………………..Full Article: Source

Top 5 Commodity Trades Of 2015

Posted on 06 January 2015 by VRS  |  Email |Print

Commodity bulls were eager to turn the page on 2014, which was yet another dismal year for the asset class. It’s quite clear that after four-straight years of declines, commodities are in the midst of one of the worst bear markets in recent history. While the fundamentals from market to market vary, broadly speaking, supplies are growing at the same time demand is weakening — a recipe for lower prices.
Looking ahead to 2015, there’s nothing to suggest the bear market in commodities will end any time soon. Trades betting on lower prices should continue to work, particularly in the energy sector. On the other hand, there are a few areas of upside potential in the precious metals complex………………………………………..Full Article: Source

Citigroup Said to Buy Credit Suisse Energy, Metals Trading Book

Posted on 22 December 2014 by VRS  |  Email |Print

Citigroup Inc.bought the bulk of Credit Suisse Group AG (CSGN)’s commodities business, continuing an expansion into a market as its biggest rivals retreat, according to two people briefed on the transaction.
The purchase includes positions in base and precious metals, iron ore, coal, crude oil and oil products, U.S. and European natural gas, and freight, said the people, who asked for anonymity because the deal hasn’t been made public. Employees won’t change firms as a result, said the people, who didn’t provide details about the terms of the transaction………………………………………..Full Article: Source

India: Commodity trading turnover halves to Rs 65-trillion in 2014

Posted on 19 December 2014 by VRS  |  Email |Print

Grappling with its biggest ever scam running into Rs 5,600 crore, it appears to be a journey down the hill for the commodity markets with total exchange traded turnover halving to almost Rs 65 lakh crore in 2014.
Although not a formal member of the commodity futures market, the payment default at National Spot Exchange Ltd (NSEL) shook the market to its core, resulting into a series of regulatory steps to revive investor confidence and credibility during 2014 and it is now hoping for a fresh start in the new year………………………………………..Full Article: Source

Commodity crush fuels managed futures returns

Posted on 18 December 2014 by VRS  |  Email |Print

Managed futures continued their recent hot streak in November, recording their best monthly return in four years by capitalizing on plummeting commodity prices. “We’ve seen resources get crushed and different markets pull back and this strategy is taking advantage of that situation,” said Tim Pickering, chief investment officer at Auspice Capital Advisors Ltd. in Calgary.
Managed futures — or commodity trading advisor (CTA) funds as they are also known — are investment funds that provide long and short exposure to globally traded futures contracts on physical commodities such as grains, livestock, metals and energy, soft commodities like coffee, cotton, sugar and cocoa, and financial assets such as equity market indexes, government bonds and currencies…………………………………….Full Article: Source

Oil Trades Near 5-Year Low as Russia Echoes OPEC Output Policy

Posted on 18 December 2014 by VRS  |  Email |Print

Oil traded near a five-year low in New York as Russia reiterated that it will keep crude production steady next year, echoing OPEC’s strategy of refraining from curbing supply to tackle a global surplus. Futures fell as much as 3.1 percent after sliding below $54 a barrel yesterday for the first time since May 2009.
Output from Russia, the world’s largest crude producer, will be similar to this year’s 10.6 million barrels a day, according to Energy Minister Alexander Novak. Iran is offering shipments to Asia at the deepest discount in at least 14 years, according to four people with knowledge of the decision. Iraq may revisit its oil-production plans, the country’s Deputy Prime Minister said today in London…………………………………….Full Article: Source

Commodities Still Getting Trashed

Posted on 17 December 2014 by VRS  |  Email |Print

A slowdown in Chinese manufacturing and a sustained effort by OPEC to make shale oil extraction unprofitable have been just two of the factors which have been crushing commodities prices. On December 12, China’s National Bureau of Statistics reported that industrial production increased only 7.2 percent in November, on a year-over-year basis.
While that might be acceptable elsewhere in the world, the reading fell short of economists’ expectations of a 7.5 percent increase. China’s government had been anticipating that economic expansion during 2014 would remain at 7.5 percent. More recently, the People’s Bank of China has lowered its sights to 7.4 percent expansion for this year, followed by a slowdown to 7.1 percent growth in 2015……………………………………..Full Article: Source

Commodities Go From Hoard to Floored

Posted on 15 December 2014 by VRS  |  Email |Print

In understanding the latest commodities selloff centered on oil, consider a raw material lurking in your kitchen: rice. Economists think stockpiling plays a big role in commodity bubbles, but are only now getting the evidence needed to understand exactly how it works. One implication of what they are learning: Prices haven’t bottomed yet.
A standard theory of how commodity bubbles form begins with an imbalance between supply and demand. This raises prices and prompts some stockpiling, due either to worries about having enough or hopes of selling for more in the future. This curbs supply further, pushing prices higher still. Cautionary stockpiling morphs into hoarding, and the bubble inflates………………………………………..Full Article: Source

Commodities Set Up For A Continued Move Lower

Posted on 12 December 2014 by VRS  |  Email |Print

There have been few places to hide for bullish commodity traders since the end of the summer. As you can see from the chart of the iShares S&P GSCI Commodity-Indexed Trust (GSG) shown below, the bears have sent the price lower by more than 28% over the past six months. It’s only natural that many traders are left wondering when the commodities markets will rebound.
The aforementioned exchange-traded fund is a popular choice amongst commodity traders because it represents broad exposure to a wide range of futures contracts across sectors such as energy, precious metals and agriculture. We’ll take a look at the underlying commodity markets to see if we can gain a better idea of when prices may set to rebound………………………………………..Full Article: Source

India: RBI may allow FIIs to trade in commodities

Posted on 11 December 2014 by VRS  |  Email |Print

In a major boost to the sagging commodity market, the Reserve Bank of India is considering a proposal to allow foreign institutional investors (FIIs) to trade in commodities. The commodity market regulator, Forward Markets Commission, is expected to meet the RBI in this regard shortly, according to sources.
The proposal has surprised market participants, who were expecting the RBI to allow banks to trade first on the commodity exchanges before opening the doors to the FIIs. As banks actively lend to traders and farmers against warehouse receipts, it would have been logical to allow banks in first, said an analyst, who did not want to be identified………………………………………..Full Article: Source

Commodities Extend Drop to Lowest Since ’09 as Oil Loss Deepens

Posted on 10 December 2014 by VRS  |  Email |Print

Commodities extended their decline to the lowest level in more than five years as crude oil continued to fall after Iraq followed top exporter Saudi Arabia in cutting prices for Asia sales.
The Bloomberg Commodity Index (BCOM) of 22 raw materials dropped as much as 0.2 percent to 110.4571, the lowest since April 2009, and traded at 110.7105 at 2:44 p.m. in Singapore. West Texas Intermediate also fell to the lowest in more than five years………………………………………..Full Article: Source

Why Volume Is A Spurious Indicator For ETFs

Posted on 10 December 2014 by VRS  |  Email |Print

Trading volume – the number of shares of a security traded in a given day or other period – has long served as a proxy for market demand. For many traders, volume is used as a confirmation indicator to price movement. An increasing price level but a decreasing volume level may indicate that demand for that security has dried up, and that the price may soon decline.
On the other hand, a stock that breaks out of its price range on higher than average volume may indicate a higher degree of interest and probability of the demand trend continuing………………………………………..Full Article: Source

Commodity prices keep falling in November

Posted on 03 December 2014 by VRS  |  Email |Print

New Zealand commodity prices declined for the ninth consecutive month in November, to the lowest level since February last year, as milk powder prices fell to five-year lows. The ANZ Commodity Price Index dropped 1.6 per cent to 286.3 last month, 12.4 per cent lower than its reading the same month a year ago and the lowest for a November month since 2012. Skim milk powder fell 7 per cent, while whole milk powder dropped 6 per cent, with both series at their lowest since 2009.
Today’s data comes ahead of the GlobalDairyTrade auction overnight. Since the start of the year dairy prices have halved at the GDT auctions as over-supply and weaker demand in China, the biggest destination for New Zealand’s largest export, weighs on prices………………………………………..Full Article: Source

Why volatility in commodity prices is still nothing close to a ‘crash’

Posted on 02 December 2014 by VRS  |  Email |Print

When looking at commodity prices, investors tend to have short memories. Words like “crash” and “collapse” have been thrown around with frequency in recent days and weeks. The panic appeared to hit a high point on Monday morning, when commodities fell sharply in the early hours before rebounding through the afternoon.
But experts noted that the current market action does not rate as anything close to a “collapse.” To see what that looks like, one only has to look back six years………………………………………..Full Article: Source

Oil, gold crash spell end of commodity ‘supercycle’

Posted on 02 December 2014 by VRS  |  Email |Print

We are likely witnessing the painful, undignified death of the commodity investment “supercycle.” Oil prices cracked below $70 per barrel after OPEC declined to cut production. Gold sank toward $1150 an ounce after a Swiss vote to compel more central bank gold buying failed and gold holdings in the SPDR Gold ETF (GLD) shrank to a six-year low. Copper sagged beneath $3 per ounce on tepid China manufacturing activity.
As I discuss with Yahoo Finance Editor-in-Chief Aaron Task in the attached video, this collectively represents a global phenomenon of not enough dollars chasing too much “stuff” – an inversion of the classic (and flawed) monetarist definition of inflation………………………………………..Full Article: Source

Physical Gold Demand in India Looks Robust

Posted on 02 December 2014 by VRS  |  Email |Print

India imported 102 tonnes of gold between November 1 and November 15, just 48 tonnes shy of its total imports for the entire month of October. This data reveals a robust physical demand for gold in the country. Furthermore, India is looking to remove its 80/20 rule this week in order to free up gold flows into the country while eliminating distortions in the flows.
Central banks have been under pressure in Europe to account for gold held abroad. The latest news comes from France, where Governor of the Bank of France M. Christian Noyer has been asked to comprehensively audit the nation’s gold reserves. Likewise, the Netherlands repatriated some of its gold in order to restore confidence in the central bank. The increase in proprietary holding of gold by central banks is positive for global gold demand………………………………………..Full Article: Source

Oil, commodities drop helps stabilise fragile EMs: QNB

Posted on 01 December 2014 by VRS  |  Email |Print

Recent developments in global financial markets have helped stabilise some of the fragile emerging markets (EMs) that were previously thought to be at risk, QNB has said in a report. “The recent drop in oil prices is changing the risk profile of emerging markets,” QNB said.
Significant adjustments to global financial markets in the second half of 2014 include a large drop in commodity prices, the end of Quantitative Easing (QE) in the US, and a stronger dollar. These developments, particularly the drop in oil prices, have led to a divergence in EM performance and risks going forward………………………………………..Full Article: Source

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