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Saudi Kingdom’s oil exports hit 1.38bn barrels in 6 months

Posted on 17 July 2014 by VRS  |  Email |Print

Saudi Arabia exported nearly 1.38 billion barrels of oil in the first six months of the current year (2014) that yielded SR565 billion, an economic expert was quoted by the local media. Local consumption is projected to hit 395 million barrels, or 22 percent of the total production, during the same period, Fahad bin Jumaa told Al-Riyadh Arabic daily.
The figures come at a time when OPEC (Organization of Petroleum Exporting Countries) is poised to shrink its share of the global market for the third consecutive year by 2015 for a number of reasons, including boom of shale oil in the United States despite acceleration of global demand on oil, he said………………………………………..Full Article: Source

Why trading houses are partnering with private equity firms

Posted on 17 July 2014 by VRS  |  Email |Print

Asian commodity trader Noble Group and private equity firm EIG Global Energy Partners this week announced a joint venture, Harbour Energy, that will seek to buy operating companies world-wide in the oil and gas exploration and production, gathering, processing and transmission sectors.
The deal is part of a larger effort by Noble to focus on its trading business while relying on partners to handle production of physical commodities. Singapore-listed Noble has formed two other joint ventures over the last year to deal with production of commodities in the agriculture and mining sectors. In both cases, it teamed with buyout shops………………………………………..Full Article: Source

Yellen Testimony Described As Mostly Neutral For Gold; Prices Decline Anyway

Posted on 16 July 2014 by VRS  |  Email |Print

Traders and analysts are characterizing Federal Reserve Chair Janet Yellen’s congressional testimony Tuesday as largely neutral for the gold market.
About an hour into her testimony, prices suddenly slipped below $1,300 an ounce for the first time since June 19. But most observers said they did not feel that the Fed chief had suddenly sounded more hawkish – other than suggesting rates could rise sooner than expected if the labor market keeps improving rapidly………………………………………..Full Article: Source

China copper trading hit by commodity financing crackdown

Posted on 16 July 2014 by VRS  |  Email |Print

A Chinese commodity trading house is accused of securing multiple bank loans against a single stockpile of copper and aluminium, causing ructions in copper prices and a dip in trading volumes.
The discovery of a financing practice by a Chinese trading firm using the same metals inventory as collateral to secure multiple bank loans has caused copper prices to plummet, yet futures traders have profited from the price dislocations………………………………………..Full Article: Source

Copper fluctuates after China trade data

Posted on 11 July 2014 by VRS  |  Email |Print

Copper futures swung between small gains and losses on Thursday, after data showed that China’s exports rose less than expected in June. On the Comex division of the New York Mercantile Exchange, copper for September delivery tacked on 0.1%, or 0.4 cents, to trade at $3.252 a pound during European morning hours. Prices held in a narrow range between $3.245 and $3.257 a pound.
Copper prices ended Wednesday’s session down 0.28%, or 0.9 cents, to settle at $3.248 a pound. Futures were likely to find support at $3.237 a pound, the low from July 7 and resistance at $3.294 a pound, the high from July 8………………………………………..Full Article: Source

Big Commodity Traders Gain Clout

Posted on 10 July 2014 by VRS  |  Email |Print

A handful of giant commodity traders such as Netherlands-based Trafigura Beheer BV and Vitol Group are increasingly taking a central role in global commodity markets. These once-obscure firms aren’t just betting on prices or arranging product shipments. They are taking on oil companies, miners and major Wall Street banks by sinking billions of dollars into refineries, power plants, ports and other assets.
The four biggest traders—Vitol, Glencore, Cargill Inc. and Trafigura—each boast annual revenue of more than $100 billion, putting them in the ranks of household names such as Apple Inc. and Chevron Corp………………………………………..Full Article: Source

Gold industry resistant to price benchmark replacement - WGC

Posted on 08 July 2014 by VRS  |  Email |Print

Gold producers and consumers are resistant to a wholesale redesign of the existing price setting benchmark known as the “fix” despite increasing regulatory glare, a discussion held by the World Gold Council found on Monday.
The debate hosted by the gold mining industry group was attended by 34 delegates from investment funds, refiners, exchanges, and other industry bodies. The four banks that currently set the globally used gold benchmark twice a day via a conference call - Barclays Plc , HSBC, Bank of Nova Scotia and Societe Generale - were not present, but the WGC said it had had meetings with them separately……………………………………..Full Article: Source

Don’t waste time fixing gold fix, it’s obsolete

Posted on 08 July 2014 by VRS  |  Email |Print

With 24-hour electronic trading, the 100-year-old gold fix has become an anachronism. Does the system of fixing the daily price of gold in London really need fixing, or should it be allowed to fade into the annals of history?
Traders and market participants will gather today in London to debate the question which has hung over the City’s precious metals market ever since it emerged earlier this year that major abuses of the 100-year-old process known as the “London gold fix” had taken place……………………………………..Full Article: Source

Commodities Obsolete in Models Yielding to Fed, ECB

Posted on 07 July 2014 by VRS  |  Email |Print

Commodities are getting a demotion from foreign-exchange strategists. Banks from JPMorgan Chase & Co. to Citigroup Inc. are reducing the weighting given to exports in their currency forecasting models as policy makers tighten their grip on financial markets.
Traditional commodity currencies, such as those of Canada, Australia, New Zealand and Norway, have become decoupled from exports by the most in as much as 13 years. “The breakdown in correlations has been significant,” Niall O’Connor, an analyst at JPMorgan in New York who specializes in tracking trends in trading patterns, said. “It’s central-bank talk that’s really become the catalyst for price action.”……………………………………….Full Article: Source

Gold Option Trade: Will Gold Continue To Consolidate?

Posted on 07 July 2014 by VRS  |  Email |Print

Until recently, the world has forgotten about Gold and gold futures prices it would seem. A few years ago, all we heard about was gold and Silver futures making new highs on the back of the Federal Reserve’s constant money printing schemes. However, after a dramatic selloff in the world of precious metals it became very quiet.
Gold prices have been in a giant basing or consolidation pattern for more than one year. As can clearly be seen below, gold futures prices have traded in a range between roughly 1,175 and 1,430 since June of 2013………………………………………..Full Article: Source

Commodity traders: Keeping track

Posted on 04 July 2014 by VRS  |  Email |Print

Commodity traders make good villains. They are rich because they are secretive, well informed and ruthless. The beans, metals and grains that they trade affect every part of modern life. Consumers can blame them for high prices, farmers and miners for low ones. Politicians worry that they distort and rig the markets they operate in.
Outsiders know surprisingly little about this world, and Kate Kelly, a reporter with CNBC, has done a good job of shedding light on some of the personalities who dominate it. Her book, “The Secret Club that Runs the World”, starts with a “cast of characters” including the well known—Mick Davis of Xstrata and his nemesis, Ivan Glasenberg of Glencore—and others less famous, such as Pierre Andurand of BlueGold Capital Management, who appears to have been a principal source for the book. ……………………………………….Full Article: Source

Gold bullion imports in India hit 13-month high

Posted on 02 July 2014 by VRS  |  Email |Print

Gold bullion imports by the India’s northern state of Gujarat touched its highest levels in thirteen months during June, primarily on account of recent relaxations in gold import norms by the new government.
Per trade figures released June 30, the total gold imports during the month of June totaled 14.33 metric tonnes (MT). This is the first time in the past year that the monthly gold imports have touched double digits. Gold imports surged by 74% compared to 8.74 MT in June last year………………………………………..Full Article: Source

Commodities traders await BNP Paribas fall-out

Posted on 01 July 2014 by VRS  |  Email |Print

The nearly $9 billion (CHF8 billion) fine imposed on French bank BNP Paribas could have a major impact on the Geneva commodities sector, according to one expert. The violations arose mainly from the bank’s Geneva-based trade finance unit that has greased the wheels of the explosive growth of commodities trading in the region.
Trade finance is a specialist banking service that provides credit to traders. The funding is vital for plugging the financial gap between traders buying a commodity in one part of the world and receiving payment once the goods have been successfully shipped to another country………………………………………..Full Article: Source

Is Africa the victim of Swiss commodities trading?

Posted on 01 July 2014 by VRS  |  Email |Print

Are mispricing and the opacity of commodities trading in Switzerland contributing to Africa’s underdevelopment? The world’s poorest continent remains heavily dependent on natural resources and so is extremely vulnerable to manipulations in the price of the commodities it extracts and exports, with very real consequences for its economies.
Switzerland is a global hub for trade in commodities, and so exerts a significant influence on Africa’s development. But critics say the way commodities are traded through the country is shrouded in opacity and this ultimately deprives developing regions such as Africa of revenue………………………………………..Full Article: Source

Best Ways To Trade Gold And Silver

Posted on 27 June 2014 by VRS  |  Email |Print

The Reuters/Jefferies CRB Index, which tracks a diverse group of commodities, has been in an uptrend since the start of the year, lead largely by the strong performance in the energy sector. Gold and silver are now following suit, with a sharp rally higher starting in July. Here are four stock and ETF plays you can use to take part.
Relative to the January 2014 low at $114.46, the recent June low was much higher at $119.42 in the SPDR Gold Trust Shares ETF (GLD), indicating accumulation. The subsequent rally through resistance in the $126 to $127 region signals a broader upside move could be underway………………………………………..Full Article: Source

China’s small commodity traders at risk if banks tighten financing

Posted on 26 June 2014 by VRS  |  Email |Print

A warehouse fraud at China’s third-largest port has forced banks and trading houses to consider new controls in the country’s massive commodity financing business, which traders say could lead to drying up of credit for all but large firms and state-owned companies.
China’s commodities trading is dominated by the large and state-owned companies but there are thousands of small firms in the market. Faced with tougher bank requirements for financing, they could sell down stockpiles, squeezing demand for metals and other raw materials such as rubber in the world’s biggest consumer of commodities………………………………………..Full Article: Source

The US To Allow Crude Oil Exports; Not That It Will Make Much Difference

Posted on 26 June 2014 by VRS  |  Email |Print

We’ve the news that the US is to allow some crude oil exports for the first time since the ban on them was set in place in the 1970s. This is good news as it removes an economic inefficiency (and removing economic inefficiencies is always good news) but it’s not going to make all that much difference to the nation as a whole.
It’s really all a fight between the independent crude producers and the independent refiners. They, obviously, care about how this goes, crude exports or no crude exports, but it makes very little difference to the rest of us………………………………………..Full Article: Source

NCX To Launch E-Trading System

Posted on 25 June 2014 by VRS  |  Email |Print

The Nigeria Commodity Exchange has revealed plans to inaugurate an electronic warehouse receipt system on July 10, 2014. The Managing Director of the Exchange, Mr. Yusuf Abdurrahman, said this in Lagos on Monday in company with the MD and Chief Executive Officer, Bank of Agriculture, Dr. Mohammed Santuraki; and the MD/CEO, Stanbic IBTC Bank, Mrs. Shola David-Borha.
The NCX, previously called Abuja Commodities and Securities Exchange, is collaborating with both banks, the Central Securities Clearing System Plc and the Federation of Agricultural Commodity Association of Nigeria on the project. Stanbic IBTC is the settlement bank………………………………………..Full Article: Source

Commodities Are Finally Rebounding — Here’s How To Profit

Posted on 20 June 2014 by VRS  |  Email |Print

Those who loaded up on gold, oil and other commodities a few years ago in anticipation of raging inflation related to quantitative easing are likely very disappointed. As most investors probably know, commodities have trailed stocks pitifully in recent years. The Dow Jones-UBS Commodity Index (DJ-UBSCI), which tracks a group of 20 commodities, fell 6.5% a year for the past three years, while the S&P 500 gained 17.6% annually during the same period.
But one of the nice things about investing is just about everyone gets a chance to be right if they wait long enough… and commodities investors may finally be having their day………………………………………..Full Article: Source

Do Commodity Traders Really Run The World?

Posted on 20 June 2014 by VRS  |  Email |Print

It was May 5, 2011, Osama Bin Laden had just been captured and killed, and general instability in the Middle East was on the uptick. Surface logic might dictate a spike in oil prices, and BlueGold Capital Management co-founder Pierre Andurand had an $8 billion dollar oil position that was set to soar in value assuming a rise in the price of crude.
The problem for Andurand, as Kelly reported, was that oil prices were declining sharply, so much so that the London-based Frenchman instructed his traders to sell out of their bullish position. As he put it amid a bloody day for his fund, “Sell a few hundred million worth! See how the market takes it.”……………………………………….Full Article: Source

CFTC rules risk hedging commodities – experts

Posted on 20 June 2014 by VRS  |  Email |Print

A panel of commodities traders have warned the CFTC it could hurt end users. Commodities experts have rallied against a plan by the US derivatives watchdog to limit speculative positions on commodities, arguing the rules would harm legitimate end users who use the products to hedge.
The US Commodity Futures Trading Commission (CFTC) hosted a public roundtable on Thursday comprising all five members of the agency, including the new chairman Timothy Massad. But experts at the roundtable argued that the commission does not understand the complexity of physical commodity hedging, and called for a hedging exemption for corporates and end-users to allow them to manage their risk effectively, free from unnecessary regulation………………………………………..Full Article: Source

City of London boosted by China currency trading move

Posted on 19 June 2014 by VRS  |  Email |Print

London will be the base for the first clearing bank outside Asia for the Chinese currency, supporting Britain’s push to be the leading western centre for offshore renminbi trading. People’s Bank of China (PBC), the country’s central bank, has appointed China Construction Bank as the UK’s first clearing bank for renminbi.
China, the world’s second-biggest economy, is promoting the use of its currency in international trade and is expected to further liberalise the renminbi in the next few years. London is competing with New York, Paris and other financial centres to be the top offshore renminbi centre outside Asia…………………………………..Full Article: Source

Things to know before you start trading in commodities

Posted on 18 June 2014 by VRS  |  Email |Print

Last decade there emerged a new avenue for retail investors and traders to participate: this was the new modified electronic platform of commodity derivatives. For those who want to diversify their portfolios beyond shares, bonds and real estate, commodities emerged as an alternative tool and one of the best option across the globe.
Till some years ago, this wouldn’t have made sense. For retail investors, they could have done very little to actually invest in commodities beyond gold and silver however the emergence of state of the art technology and methodologies it became possible to think beyond traditional asset class and invest or manage the risk in various other commodities like chana, oilseeds, crude oil and copper etc. in the futures market………………………………………..Full Article: Source

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Bankers Focus on Trading Firm in Search for Metals Used as Collateral

Posted on 11 June 2014 by VRS  |  Email |Print

Bankers in China are focusing on the actions of a commodities-trading firm as they scramble to find metals they believed were backing loans but which appear to have been used as collateral multiple times.
The operator of Qingdao port, on China’s eastern coast, said this week Chinese authorities were investigating an alleged fraud involving metals stored at the port and used as collateral to obtain multiple bank loans………………………………………..Full Article: Source

Commodity shipping demand to surge

Posted on 11 June 2014 by VRS  |  Email |Print

Demand for ships to haul iron ore, coal and other cargoes poised to surge this year, outpacing expansion in the fleet of vessels that can transport the commodities, according to ACM Shipping Group, a shipbroker. Demand for ships to haul dry-bulk goods will jump 12 per cent this year while the supply of vessels expands 4.7 per cent, ACM said in a report on Monday.
Fleet utilisation will jump 7.3 per cent, the most in more than five years, and by a further 8.1 per cent next year, it estimates. Demand is strengthening because falling prices for iron ore are driving up shipments to China from countries including Brazil and Australia, ACM said………………………………………..Full Article: Source

Expect spot gold prices to trade negative

Posted on 10 June 2014 by VRS  |  Email |Print

Spot gold prices are expected to trade on the negative note on the back of strength in DX and expectations among the market participants that the US Federal Reserve may continue reducing its stimulus package at same pace, says Sushil Finance.
A spot gold price decreased by 0.08 percent on Friday’s trading session on the back of positive job data from US indicating improvement in labor market. Further, strength in DX and expectations among the market participants that the US Federal Reserve may continue reducing its stimulus package at same pace added downside pressure on the prices………………………………………..Full Article: Source

Demand for gold rising in S’pore, say dealers

Posted on 10 June 2014 by VRS  |  Email |Print

Bullion dealers said that demand for precious metals like investment-grade gold and silver is rising in Singapore — this is due to the recent weakness in prices as well as tax-exemption in Singapore. Precious metals investors overseas are also looking more to Singapore as a haven to store their hoard.
According to retailer BullionStar, demand has roughly doubled in the first half of this year compared to the same period in 2013. Singapore aims to have a “gold-standard” environment for buying, selling and storing investment-grade precious metals — typically gold or silver products of close to 100 per cent purity………………………………………..Full Article: Source

Gold fix under scrutiny as regulators probe archaic system

Posted on 10 June 2014 by VRS  |  Email |Print

The cozy little world of gold trading is getting less comfortable. A handful of bankers in London currently set the world standard for gold prices, a practice that started in 1919 and is widely used by governments, miners and brokers to buy and sell the precious metal and its financial derivatives. But regulatory probes have shone an unwanted spotlight on the benchmark known as the London gold fix, and prompted calls for change.
The five banks that set the standard - Barclays, Bank of Nova Scotia, Société Générale, Deutsche Bank and HSBC - have been hit by multiple lawsuits from investors alleging they colluded to rig the price for their own benefit. Deutsche Bank, which gave up its seat on the gold-ixing panel, said the lawsuits had no merit. Barclays, SocGen and HSBC had no comment, and Scotiabank could not be reached………………………………………..Full Article: Source

China’s commodities imports fall in May on high stocks, tighter credit

Posted on 09 June 2014 by VRS  |  Email |Print

China’s imports of major commodities fell in May from the previous month, official customs data showed on Sunday, as companies scaled back on orders after robust shipments in the previous months caused a supply overhang.
Falling product prices on the back of sluggish demand have led loss-making companies, especially steel mills and crushers, to reduce orders, while increased scrutiny on commodities financing and tighter credit also weighed on import demand………………………………………..Full Article: Source

Asset-backed trading becoming the norm in commodity market

Posted on 05 June 2014 by VRS  |  Email |Print

From the middle of the last decade, large banks world-wide got involved in business far removed from their traditional lending activity – trading in physical commodities. Currently, these banks are retreating from this activity. The shift is empowering commodity trading houses to consolidate their control over supply chains for food, oil and metals.
Commodity traders are rapidly expanding from the traditional intermediary business model of buying and selling, where margins are very thin, to “asset-backed trading models”, where they are investing in production, processing, and logistics………………………………………..Full Article: Source

Barclays gold fixing ‘could be the tip of the iceberg’

Posted on 05 June 2014 by VRS  |  Email |Print

Attempts by traders to move benchmarks to protect digital derivatives contracts - as was seen in Barclays’ recent fine by the FCA - could be a routine occurrence, industry insiders have warned.
Last month, Barclays was fined £26m for failing to adequately manage conflicts of interest as well as systems and controls failings, after a former trader placed orders to influence the London Gold Fixing and avoid paying out on a digital exotic options contract on the price of the yellow metal………………………………………..Full Article: Source

China Mulls Offshore Yuan Gold Trade in Free Trade Zone

Posted on 05 June 2014 by VRS  |  Email |Print

China, the world’s largest bullion consumer and producer, is considering allowing the use of offshore yuan in gold trading in the Shanghai free-trade zone.
The Shanghai Gold Exchange, the country’s biggest physical bourse for the metal, is proposing to let holders of offshore yuan accounts trade the three contracts it will offer, including bullion of 99.99 percent purity, according to a draft of the plan obtained by Bloomberg News………………………………………..Full Article: Source

U.S. 2014 agricultural exports near record $150 billion

Posted on 30 May 2014 by VRS  |  Email |Print

U.S. agricultural exports for fiscal 2014 will reach a record $149.5 billion, the Department of Agriculture said on Thursday, higher than its earlier forecast of $142.6 billion and up 6 percent on the year.
The forecast for the U.S. agricultural trade surplus in fiscal 2014 is up $6.3 billion from the February estimate to $39 billion, its second highest ever. The fiscal year started on Oct. 1 and will end on Sept. 30………………………………………..Full Article: Source

Scotiabank Q2 commodity trading revenue boosted by precious metals

Posted on 28 May 2014 by VRS  |  Email |Print

Bank of Nova Scotia, one of the world’s biggest bullion banks, on Tuesday reported its best quarterly trading revenue from commodities in over a year due to improving precious metals markets even as scrutiny of global bullion pricing intensifies.
In its second quarter to end-March, Canada’s third-largest bank said trading revenue from commodities hit C$98 million, up 9 percent from the prior quarter and highest since the first quarter to end-December 2012, according to a filing………………………………………..Full Article: Source

India: Banks can wait to trade in commodity futures

Posted on 27 May 2014 by VRS  |  Email |Print

At a time when the Government is keen to fight inflation, readying to reform the commodity market and reduce the role of speculative capital, it is incongruous that a Finance Ministry panel should recommend that commercial banks and foreign institutional investors should be allowed to enter the commodities futures market. Currently, banks, mutual funds and FIIs are not allowed to trade commodity futures; and the market is none the worse for it.
Way back in 2006, the Gupta Committee report released by Reserve Bank of India argued in favour of allowing banks, MFs and FIIs to trade commodity futures. The policymakers kept the recommendation on hold, and for good reasons………………………………………..Full Article: Source

China’s aluminium, alumina imports show unexpected surge in April

Posted on 23 May 2014 by VRS  |  Email |Print

China’s aluminium imports were unexpectedly high in April at 35,199 tonnes, with some market participants attributing the figure to financing demand for the light metal.
The imports were up 150.9% year-on-year, the latest customs data showed. “The shipments were more than expected, as high premiums for imports have choked demand,” a trader said. The April imports were 14.7% lower than the previous month but above market expectations. Premiums for imported aluminium ingots have stayed around $370 per tonne in the past few months, resulting in large losses for Chinese importers……………………………………..Full Article: Source

Why there is no perfect strategy for hedging in commodity markets

Posted on 22 May 2014 by VRS  |  Email |Print

Inventories for storable commodities have always played a crucial role in price formation. It acts as a buffer that helps absorb shocks to demand and supply affecting spot prices. However, there is a possibility of a stock-out implying that the basis can surge in times of shortages. In case of importable commodities, such situations are sometimes created by squeezing the supply lines for a time period.
On the other hand, larger processors of soyabean, mustard and maize hold commodities to reduce costs of adjusting production over time and also to reduce marketing costs by facilitating production and delivery scheduling and avoiding stock outs………………………………………Full Article: Source

China, Russia sign historic gas deal

Posted on 22 May 2014 by VRS  |  Email |Print

China signed a long-awaited deal for Russian natural gas Wednesday, giving China a new energy source and Russia a diplomatic boost in the face of sanctions and condemnation for its aggressive actions in Ukraine.
Announced after meetings between Chinese President Xi Jinping and Russian President Vladimir Putin at an Asia security conference, the 30-year deal is worth an estimated $400 billion, according to comments in Russian media by Gazprom chief executive Alexei Miller………………………………………Full Article: Source

India’s central bank allows private agencies to import gold

Posted on 22 May 2014 by VRS  |  Email |Print

India’s central bank eased tough gold import rules on Wednesday by allowing seven more private agencies to ship the precious metal, a move that industry officials say could augment supplies and reduce premiums in the peak wedding season.
Gold imports by India, the world’s No. 2 bullion consumer after China, could quickly rise from current levels, according to the officials. This would help global prices, which slumped 28 percent last year, partly due to India’s import curbs………………………………………Full Article: Source

Senators fret over high-frequency commodity trades

Posted on 15 May 2014 by VRS  |  Email |Print

Senators are fearful that high-frequency traders are getting an unfair advantage and endangering the stability of the U.S. futures market, the financial exchange for trades of commodities like corn and gold. But industry experts warn against rushing to impose new regulations.
“These markets have changed dramatically over the years – for a 21st century market, we need a 21st century regulator,” said Sen. Debbie Stabenow, D-Mich., who called a hearing of the Senate Agriculture Committee she chairs to consider the issue………………………………………..Full Article: Source

Silver Fix Gone; Is Gold Next? - Jeff Christian

Posted on 15 May 2014 by VRS  |  Email |Print

Following Wednesday’s news that the London silver fix is set for the chopping block in August, the question now is, could gold be next? CPM’s Jeff Christian says “it’s a possibility.”
However, before looking at the London gold fix, Christian said, in an interview with Kitco News’s Daniela Cambone, regulators and organizations like the London Metals Exchange, London Bullion Market Association will have to scramble to fill the potential void in the silver market………………………………………..Full Article: Source

Curtain to Fall on London’s Historic Silver Benchmark

Posted on 15 May 2014 by VRS  |  Email |Print

After 117 years, London’s silver fix will be set for the last time on Aug. 14. The demise of the fix, which is being scrutinized by regulators as part of a broader probe of financial benchmarks, leaves jewelers, miners and investors in need of a new way to price the metal for the first time since 1897.
“We will need to find a substitute,” said Lenic Rodriguez, chief executive of Canadian silver miner Aurcana Corp.”The silver price is very speculative and volatile so for accounting and planning purposes, the benchmark is good.”……………………………………….Full Article: Source

El Nino a looming wild card for commodities

Posted on 14 May 2014 by VRS  |  Email |Print

Commodity traders are placing their bets on El Nino. The periodic weather phenomenon leads to torrential rain in South America and droughts in Asia and Africa, and may provide a needed boost for commodities after last year’s slump in prices.
Weather forecasters around the world are predicting that a shift in climate patterns could occur this summer, with some warning of the strongest El Nino in more than a decade………………………………………..Full Article: Source

China’s slack April commodities output foreshadows weak import demand

Posted on 14 May 2014 by VRS  |  Email |Print

China’s crude oil runs, oil demand and total base metals production unexpectedly fell in April from the preceding month, with slackening power generation also fanning concerns that the world’s second-largest economy is not yet on a stable footing.
Although record-high daily crude steel output was a bright spark in April’s output figures, slowing real estate investments and falling property sales are set to drag on the steel sector in the coming months, analysts said………………………………………..Full Article: Source

Impact of Algo trading on commodity exchanges

Posted on 14 May 2014 by VRS  |  Email |Print

High Frequency Trading (HFT), through systematic computer based algorithms by gauging market movements and eventually acting upon pre-defined protocols, has become a popular mode commodity derivatives trading.
Such techniques initially introduced in fixed income, currency, and equity markets are now increasingly being applied to trading in bullion, energy, and the agricultural commodities. HFT has contributed to a surge in the number of trades in NYMEX crude from under 1 million in 2005 to almost 42 million in 2011, and in CBOT corn from 133,000 to 10.7 million………………………………………..Full Article: Source

China Extends Commodity Buying Tear

Posted on 09 May 2014 by VRS  |  Email |Print

China extended its buying spree for major industrial commodities in April, signaling that its decelerating economy still needs huge amounts of inputs to fuel growth.
China is the largest buyer of many commodities, from nickel to iron ore, and its slowing economic growth has pushed global prices down. But China’s economy is still growing fast – around 7.5% annually – and it appears that Chinese buyers have been bargain hunting for commodities and energy………………………………………..Full Article: Source

The importance of storage rates in commodity trade

Posted on 08 May 2014 by VRS  |  Email |Print

Commodity futures market convergence is the process where prices in the spot and futures markets come together or converge at futures market expiration. Convergence occurs at the expiry date of every futures contract because of arbitrage. If spot prices remain below futures prices, a market participant could buy in the spot market and sell in the futures market and make a risk-free profit.
Similarly, if the spot price is above the futures price, a market participant can buy in the futures market, take delivery and sell in the spot market and earn a risk free-profit………………………………………..Full Article: Source

Iran’s oil exports fall in April, closer to Western limits

Posted on 02 May 2014 by VRS  |  Email |Print

Iran’s oil exports fell in April for a second month, according to sources who track tanker movements, moving closer to levels allowed by November’s interim deal on curbing Tehran’s nuclear programme.
The decline may reflect seasonally lower crude oil demand and U.S. pressure on some customers take less. Signs of higher Iranian sales since late 2013 have led to concern in Washington that a softening of sanctions has given Tehran’s economy a boost………………………………………..Full Article: Source

India: MoF proposes single clearing platform for commodity exchange trades

Posted on 02 May 2014 by VRS  |  Email |Print

The ministry of finance is working out a roadmap to substantially bring down the transaction cost of trading on the commodity exchanges . According to official sources, in line with the banking system, there is need for common clearing system of the commodity trades. This commonality of clearing of transactions will require a common platform where multiple trades across exchanges can be settled.
In the process, the traders can cut down the transaction cost by becoming the member of a single platform for clearing of trades. At present, a trader will have to pay fees for becoming a member of separate clearing platform floated by different commodity exchanges. This entails heavy cost, multiplicity of trades, cross margining etc………………………………………..Full Article: Source

Some banks haven’t given up on trading commodities. And that’s a good thing.

Posted on 30 April 2014 by VRS  |  Email |Print

As expected, the recent by some of the largest energy trading banks has created a temporary dearth of capability, and sometimes liquidity, in the international commodity markets. Born a child of the Financial Crisis and the BP Deepwater Horizon oil spill, and later ensconced into law through Dodd-Frank, the Volker Rule and other international regulations, the anti-bank sentiment amongst policymakers has driven many of the largest players into various stages of transition toward smaller footprints.
The likes of JP Morgan, Morgan Stanley, Barclays, Deutsche Bank and Bank America – to name a few – are staring at the exit signs for some or all of their business. This is not good………………………………………..Full Article: Source

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October 2014
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