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China’s slowdown is putting pressure on commodities market: Hemindra Hazari

Posted on 28 November 2014 by VRS  |  Email |Print

By and large everything has gone up in this market, everything looks over heated. Banking has gone up and people are still talking about that it is the beginning of a multi-year bull cycle run. Commodities are under lot of pressure because China is in a slowdown mode.
Surprisingly, while imports over all were down in month of October, iron ore imports were actually up which shows that a lot of dumping is taking place. Indian people are importing the iron and the steel because that is what is happening globally……………………………………Full Article: Source

How JPMorgan struck gold with copper: Andy Home

Posted on 28 November 2014 by VRS  |  Email |Print

December 2010 and the copper market was booming. On the London Metal Exchange (LME), three-month metal was charging to the then all-time high of $9,550 per tonne, and front-month spreads were tightening.
LME reports at the time showed a single entity controlling over half of all eligible LME stocks, leading to a frenzy of speculation as to just who was squeezing the copper market. JPMorgan was “outed” in the media as the controlling hand, which only fuelled further the whirl of speculation, given the same bank was proposing to launch an exchange-traded fund backed by physical copper……………………………………Full Article: Source

Deutsche Bank Shutters Precious Metal Trading Amid Cuts

Posted on 28 November 2014 by VRS  |  Email |Print

Deutsche Bank AG (DBK), Europe’s biggest investment bank, is exiting physical trading of precious metals as it scales back its securities unit to improve returns. Some parts of the business may be shifted to other units of Deutsche Bank and the firm will continue to trade derivatives linked to precious metals, a London-based spokesman for the bank.
Global banks are exiting or paring back their commodities arms as regulators order them to increase buffers for potential trading losses and avoid a repeat of taxpayer-funded rescues. Deutsche Bank’s move is part of an overhaul of its securities unit to help boost profitability and increase the proportion of capital on its balance sheet by shrinking assets……………………………………Full Article: Source

Commodities accumulators panic – from Vienna to Zurich

Posted on 26 November 2014 by VRS  |  Email |Print

The fact that the accumulators of the world’s key commodities are gathering this week in Austria (OPEC on oil) and Switzerland (Swiss vote on gold reserves) to rein in a sharp decline in their valued resources is a manifestation of rising deflation risks emerging from a strengthening US dollar and a slowing Chinese economy.
Year-to-date, the Reuters/Jefferies CRB Commodity Index is down 5%, and as much as 15% from its June highs. Admittedly, the index is more weighed towards energy commodities than to metals and agricultural commodities. But the technical break of the CRB’s 30-month trendline (green support line in chart), portends further declines below the 260 level……………………………Full Article: Source

Global metal trading becomes more difficult to regulate

Posted on 25 November 2014 by VRS  |  Email |Print

Global metals markets are becoming more difficult to regulate as manipulation takes more subtle forms and new trading platforms spring up, according to a new study. The movement of commodities trading to new hubs in Singapore, Dubai and China adds additional complications for national regulators, London-based think-tank Chatham House will say in a report set to come out next month.
“Opaque pricing mechanisms and weakly governed market platforms are vulnerable to manipulation by powerful market participants, including trading houses, major producers and financial institutions,” the report says………………………………….Full Article: Source

US Senators question banks over commodities trading

Posted on 21 November 2014 by VRS  |  Email |Print

Executives of three US banks are being grilled by senators over accusations the banks engaged in unfair trading practices relating to several commodities. A two-year report found that Goldman Sachs, Morgan Stanley and JP Morgan Chase bought up large stockpiles of commodities like aluminium and copper.
In doing so, they were able to influence prices and gain advantages. The banks deny they exploited any trading advantages from these holdings…………………………………Full Article: Source

China ‘triple bubble’ points to long slide for commodities

Posted on 21 November 2014 by VRS  |  Email |Print

The “commodity super cycle” is dead. Now, it’s time to get used to the “commodity super down cycle, and China is the biggest reason why, warn strategists at Credit Suisse in a Thursday note.
Commodity demand tends to be very cyclical. Commodities, however, have been underperforming cyclical indicators of growth, including industrial production and new manufacturing orders (as measured by Institute for Supply Management survey data), they say. Much of the blame is on China, the strategists argue, noting that the country remains the “most significant source” of demand for most industrial commodities…………………………………Full Article: Source

U.S. Fed began rejecting commodity trade requests in 2010: report

Posted on 20 November 2014 by VRS  |  Email |Print

The U.S. Federal Reserve has been quietly quashing some Wall Street requests to delve more deeply into physical commodity markets since 2010, according to a new Senate report that includes previously unreported details of the Fed’s oversight of the area.
While critical of the “uncoordinated, incoherent patchwork” of rules limiting banks’ activities in physical raw materials trading, the report by the Permanent Subcommittee on Investigations also showed for the first time that the Fed had actually begun denying some requests to engage in the market………………………………Full Article: Source

Currency trading: Fixed penalty

Posted on 17 November 2014 by VRS  |  Email |Print

Once again, a handful of the world’s largest banks have agreed to pay vast amounts of money to settle an investigation, this time concerning the manipulation of benchmarks used in the trading of currencies. American, British and Swiss regulators clubbed together to squeeze six banks for $4.3 billion between them. Yet more fines may be in the pipeline.
The deal announced on November 12th follows a now familiar pattern: regulators release e-mails or instant messages they have harvested that indicate sleazy activity in an important market; banks issue statements that are contrite, emphatic about a commitment to moral values yet vague about what exactly occurred; no one charges any individuals with any crimes and lots of questions are left unanswered, including how the regulators calculated the penalties (Britain’s FCA being an honourable exception)……………………………………Full Article: Source

Rise of protectionism in China a threat to commodities imports

Posted on 14 November 2014 by VRS  |  Email |Print

As China lobbies world leaders to back its free trade plan at an Asia-Pacific summit this week, businesses are complaining about Beijing’s use of non-tariff barriers from customs clearance to quality restrictions to curb raw material imports.
Amid a slowdown in economic growth, the world’s top commodities buyer is facing a supply glut that has sent local prices tumbling and miners deep into the red. Inventories of iron ore, coal and cotton are bulging at ports across the country and state granaries are overflowing…………………………………Full Article: Source

Standard Chartered CEO Commits to Commodities Financing

Posted on 14 November 2014 by VRS  |  Email |Print

Standard Chartered Plc (STAN) Chief Executive Officer Peter Sands said financing commodity trade will remain an essential part of its business even after falling prices worldwide helped curb a decade of profit growth.
The company is tightening lending criteria to reduce risk from its $61 billion of credit exposure to commodities, exacerbated by slowing economies in India, China and Korea, the bank’s management said today after a three-day meeting with some of its shareholders in Hong Kong…………………………………Full Article: Source

Swiss regulator flags attempt to manipulate bullion benchmarks

Posted on 13 November 2014 by VRS  |  Email |Print

Switzerland’s financial watchdog said on Wednesday it had found a “clear attempt” to manipulate precious metals price benchmarks during a cross-market investigation into trading at UBS bank.
The FINMA regulator revealed its findings just days after the precious metals industry decided to automate the setting of reference prices for gold, ending the twice-daily “fix” by a panel of banks which has been used for almost a century………………………………………..Full Article: Source

Volatility hurting commodities, says PwC

Posted on 12 November 2014 by VRS  |  Email |Print

Global economic challenges, the strengthening U.S. economy, and an imbalance of supply and demand have had a devastating impact on the commodities market, according to PwC’s Gold, Silver and Copper Price Report. The report notes low prices have led to widespread cuts across the sector from exploration to production and both operating and capital expenses.
However, the current slump in prices is reflective of the cyclical nature of the industry. For gold companies, while the long-term view is above current spot prices, volatility remains the key issue. For base metal producers, a growing global population that will have greater overall need for products such as cars, computers and household goods has helped support current prices.’……………………………………….Full Article: Source

China commodity imports don’t fit soft economic narrative: Russell

Posted on 11 November 2014 by VRS  |  Email |Print

It’s becoming increasingly hard to make Chinese commodity import data fit with the prevailing narrative of a softening in the world’s second-biggest economy. Trade figures released Nov. 8 showed ongoing strength across a broad spectrum of commodity imports, with the only consistent weak spot this year being coal.
October iron ore imports may have slipped 6.3 percent from the previous month’s high to 79.39 million tonnes, but they are still up 16.5 percent in the first 10 months of the year over the same period in 2013, on track for the strongest annual growth since 2009………………………………………..Full Article: Source

India: Commodities in regulated warehouses exempted from stock limit

Posted on 11 November 2014 by VRS  |  Email |Print

The government has exempted commodities kept in regulated warehouses from the purview of stock limits effected by state governments to curb hoarding under the Essential Commodities Act.
This was one of the key reforms that commodity markets regulator Forward Markets Commission (FMC) was pushing with the Consumer Affairs Ministry for last few years. In a latest circular, the commission said: “Department of Consumer Affairs has informed that the commodities kept in regulated warehouse (registered by the Warehousing Development and Regulatory Authority) have been exempted from stock holding limits under the Essential Commodity Act, 1955.” ……………………………………….Full Article: Source

China Oct commodities imports fall despite price slump; copper rebounds

Posted on 10 November 2014 by VRS  |  Email |Print

China’s imports of most major commodities fell in October from month ago due to seasonal factors and a weaker economy, with copper the lone bright spark as trade gradually returned to normal after a financing scandal.
The demand outlook for iron ore and coal for the rest of the year remains bleak, analysts said, as steel mills have started to cut output on continuing weakness in demand and the usual winter slowdown in use. Import tariffs on coal since October are also making overseas supplies uneconomic………………………………………..Full Article: Source

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Egypt commodities mega-project plan fails to convince traders

Posted on 10 November 2014 by VRS  |  Email |Print

Egypt’s aim to transform itself into a global commodities hub has so far failed to convince the multinational commodities companies that are key to the project’s success, as they worry about the plan’s ambition but lack of detail.
President Abdelfattah al-Sisi’s government last month unveiled a multi-billion project to build a commodities re-export and trading complex, giving a timeline of two years and price tag of 15 billion Egyptian pounds ($2.1 billion) but few specifics………………………………………..Full Article: Source

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Commodity slump brings gains, losses

Posted on 07 November 2014 by VRS  |  Email |Print

Everything is cheaper. Almost. The commodity supercycle that started in the 2000s, fuelled by China’s enormous appetite, and which peaked around the time of the Beijing Olympics in 2008, is tapering off. And how! Oil is currently trading in the low $80s, the lowest level in more than four years, and major metal and food prices have fallen steeply.
Iron ore is at the lowest in more than five years after losing 43% this year. Lower commodity prices promise to translate into lower inflation and already, India’s bonds have rallied in anticipation of an earlier-than-foreseen cut in interest rates late this year or early next year………………………………………..Full Article: Source

Are Commodities at a Major Turning Point?

Posted on 07 November 2014 by VRS  |  Email |Print

As most of you probably know, I have been expecting the CRB to form a major three year cycle low sometime next summer. However, I’m now starting to see some things that might indicate a major cycle bottom is going to occur earlier than I expected.
Since oil is the main driver of the CRB, and most commodities will follow its lead, I’m going to focus on the action in oil. Notice in the next chart that oil has now reached oversold levels similar to, if not more extreme than, the previous two 3 year cycle lows………………………………………..Full Article: Source

3 Ways to Trade Gold Now

Posted on 07 November 2014 by VRS  |  Email |Print

Goldbugs, like ideologues and passionate lovers, possess extraordinary convictions. They need them now more than they have in decades. The yellow metal is undergoing a powerful decline that will challenge their beliefs in ways many goldbugs have never experienced.
Gold is dancing around a four-year low as the U.S. dollar rises to a four-year high against the euro and a seven-year high against the yen. Trading patterns in the stock, options, and futures markets suggest prices will fall further. Gold recently traded at around $1,148 per ounce, far from the halcyon high of about $1,900 in late 2011. It is down 11% in the past three months………………………………………..Full Article: Source

New push to ease Japan commodity trading rules

Posted on 06 November 2014 by VRS  |  Email |Print

A top Japanese politician is pushing for an overhaul of regulation governing exchanges, potentially opening the door to a long-awaited consolidation of the country’s fragmented trading landscape.
Masahiko Shibayama, the firebrand head of the ruling Liberal Democratic Party’s finance division, wants to change laws so that Japan Exchange Group (JPX) – formed from the January 2013 merger of the Tokyo and Osaka securities exchanges – can offer commodity futures without seeking permission from the powerful Ministry of Economy, Industry and Trade (Meti)………………………………………..Full Article: Source

Don’t rule out OPEC cut, say top oil traders

Posted on 05 November 2014 by VRS  |  Email |Print

Forget conspiracy theories and be prepared for OPEC to cut output in November because this is what they need to do and have done in the past, veteran oil traders who run and co-own some of the world’s biggest trading firms told the Reuters Commodities Summit.
The views from the top executives of Vitol, Gunvor and Mercuria go against expectations that the 12-member Organization of the Petroleum Exporting Countries is unlikely to step in and support prices………………………………………..Full Article: Source

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

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