Tue, Nov 25, 2014
A A A
Welcome kbr175@gmail.com
RSS

Commodities Briefing - Category | Trends more

CIBC: Gold prices likely ‘not too far from their cyclical lows’

Posted on 10 October 2014 by VRS  |  Email |Print

Gold prices are “probably not too far from their cyclical lows,” said CIBC World Markets in a commodity update released Thursday. The Canadian bank forecast gold to be around $1,300 an ounce at the end of 2015.
CIBC recounted factors that have pressured the metal since earlier in the year, including a renewed bid in the U.S. dollar, muted inflationary pressures and market chatter about the U.S. Federal Reserve eventually tightening monetary policy………………………………………..Full Article: Source

Commodities: Growth worries push oil and copper futures lower

Posted on 09 October 2014 by VRS  |  Email |Print

The commodity space was pressured lower on Tuesday as worries regarding weak growth in the Eurozone and Asia continued to filter through all asset classes. Concerns regarding excessive US dollar strength going forward seemed to be a common ‘talking-point’ in markets.
So much so that US Treasury Secretary Jack Lew told his audience at a speech delivered at the Petersen Institute that the US cannot be the world’s only growth engine. It was against that backdrop that front-month West Texas crude futures fell $1.6 to $88.85 per barrel on the NYMEX. Three-month copper futures were also lower, finishing the session down 0.6% to $6,670 per metric tonne on the LME………………………………………..Full Article: Source

Is OPEC heading for a sinkhole?

Posted on 09 October 2014 by VRS  |  Email |Print

Turmoil is rarely good for the bottom line. Saudi Arabia, Qatar and the United Arab Emirates are joining Washington’s anti-Islamic State air strikes within the borders of neighboring OPEC member Iraq. Fellow OPEC partner Nigeria just barely dodged an Ebola scare, while founding member Iran remains under sanctions aimed to curb its nuclear ambitions.
Meanwhile, Russia, which last year produced an estimated 10.4 million barrels of crude oil a day, doesn’t look set to extricate itself from Ukraine any time soon. Much of the oil-producing world is in turmoil, yet OPEC prices have fallen almost 20 percent since June. The reasons for this are complex, but include significant increases in the U.S. production of shale oil—also known as “tight oil”—over the past few years, which have eroded the American demand for imported oil………………………………………..Full Article: Source

It’s a super market price war! (in oil)

Posted on 09 October 2014 by VRS  |  Email |Print

That Saudi Arabia and the Opec cartel were going to be “disrupted” by North Dakota millionaires was hardly difficult to foresee. What was always harder to figure out, however, was how Saudi would react. Would Opec’s most important swing-producing state cave in and give up on market share for the sake of price control?
Or, conversely, would it be more inclined to follow along the lines of the Great UK Supermarket Price War, and enter a clear-cut race to the bottom? So far, it seems, the strategy is focused on the latter course. Which means people are finally beginning to wonder just how sustainable a path that really is………………………………………..Full Article: Source

Bitcoin speculators being crushed will they now move into silver?

Posted on 09 October 2014 by VRS  |  Email |Print

Every market has its favorite speculative asset and for the past few years the electronic funny money Bitcoin has ruled this roost. Yesterday Bitcoin rebounded from a 20 per cent sell-off over the weekend. But year-to-date speculators in this novel specie have lost 40 per cent of their money in dollar terms.
These are the same mad speculators who drove the silver price up to nearly $50 three years ago. Since then the shiniest of metals has crashed back to earth and now stands at an alluring $17 an ounce, precisely the point at which it previously began its almost 300 per cent price surge………………………………………..Full Article: Source

Rising supply in key commodities weighs on prices

Posted on 08 October 2014 by VRS  |  Email |Print

Commodity markets remain on the defensive with rising supply in many key commodities continuing to apply near-term downside pressure to prices. That, not least, is also due to current concerns about a slowdown in global growth and its potential negative impact on demand at a time where the dollar continues to go from strength to strength.
The adversity created by the current rise in the dollar looks set to be theme that will stay with us for the foreseeable future with analysts currently expecting the greenback’s ascent to continue. Some are now even talking about the rate against euro to return to parity which would represent a more than 25 percent appreciation from current levels………………………………………..Full Article: Source

Commodity super cycle going bust

Posted on 08 October 2014 by VRS  |  Email |Print

One of my key macro themes for next decade is the bust unfolding in the commodity super cycle. There are three macro forces driving this end: China’s structural rebalancing away from commodity-centric and debt-charged investment-led growth; the moderate rebound in US economic prospects, modest rises in interest rates and US dollar bull market; and, oversupply rushing to market in all sorts of commodities.
That gives you the rather sad combination of falling demand, increasing supply and a monetary headwind given most commodities are priced in US dollars, the complete inverse of the super cycle conditions that have prevailed through much of the post-millennial period………………………………………..Full Article: Source

Are Commodities Telling Us It’s 2008 Redux?

Posted on 08 October 2014 by VRS  |  Email |Print

We can look back to the 2008 global financial market meltdown and cite any number of warning signs that became so painfully obvious in hindsight. Perhaps the clearest warning sign that trouble was just around the corner began in July of 2008 when virtually all commodities entered into a steep tailspin which they would not pull out of for at least another 8 months:
Platinum, WTI crude oil, and copper offer a sampling of the steep downside reversals that commodities as a group suffered beginning in July 2008. Perhaps what was most interesting about the commodities collapse of summer 2008 was the consistent commentary that the bullish thesis for commodities (China, BRICs, global growth, etc.) was still very much intact even as prices continued to tumble………………………………………..Full Article: Source

EIA sees lower OPEC output, weaker demand growth in 2015

Posted on 08 October 2014 by VRS  |  Email |Print

The U.S. Energy Information Administration trimmed its forecast of world oil demand growth next year and made even deeper cuts in its outlook for OPEC production, the latest signs of a shift toward surplus supplies next year. The EIA cut its 2014 global demand forecast to 91.47 million barrels a day, compared with 91.55 million bpd expected last month, according to a monthly report from the agency on Tuesday.
As a result, it now expects consumption to rise by 1.24 million bpd, down 100,000 bpd from the previous month’s report but still higher than the 1 mln bpd increase estimated for 2014. On the backdrop of weakening demand, the agency curbed its forecasts for OPEC oil and other liquid fuels production to 35.51 million barrels a day in 2015, down 350,000 bpd from last month’s forecast………………………………………..Full Article: Source

Gold Can’t Hit Bottom If the Gold Bugs Keep Buying the Dips

Posted on 08 October 2014 by VRS  |  Email |Print

The gold market has had a rough go of it lately, with prices for the yellow metal falling from near $1,400 in March to just under $1,200 last week. But despite that, the gold bugs have maintained their bullishness, and that was clearly evident when the last price drop actually increased sentiment, rather than sapping it.
That’s a bad sign, MarketWatch’s Mark Hulbert said this morning on the MoneyBeat show. True bottoms form when sentiment is depressed. What’s happened recently, though, is that sentiment has actually gotten stronger even as the price fell under $1,200 last week (or, perhaps, because the price fell under $1,200). That’s not what normally happens………………………………………..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

Ag Commodities Pause As Rain Arrives, Buyers Move In

Posted on 07 October 2014 by VRS  |  Email |Print

Last week’s price action for the Ag commodities could best be described as a pause, following the long decline of the last few months, as the primary markets of corn, soybeans and wheat, finally found some support, moving sideways but with a mildly bullish tone. The catalyst was primarily twofold.
First was a change in the weather in the US with the recent benign conditions giving way to rain and as a result, a possible slowing of the crop harvests. The second, was bargain hunting with all three commodities looking increasingly oversold with the markets having now factored in the expectation of a record crops this year………………………………………..Full Article: Source

Australia’s Hockey Says Falling Commodity Prices to Hurt Budget

Posted on 07 October 2014 by VRS  |  Email |Print

Falling commodity prices will hurt Australian government efforts to rein in its budget deficit, spurring possible new savings measures, Treasurer Joe Hockey said. “Lower commodity prices in iron ore and coal are going to have an impact on our budget bottom line,” he said in an interview in New York. “There are many variables at play but there will be a negative impact.”
Iron ore has fallen 41 percent in China this year, according to Metal Bulletin, while steelmaking coal is trading at the lowest level in six years. The government aims to bring the budget back to surplus over the medium term after recording a deficit of A$48.5 billion ($42.5 billion) for the 12 months that ended June 30, Hockey said last month………………………………………..Full Article: Source

Long-term Forecast for Commodity Prices and Mining Industry Funding

Posted on 07 October 2014 by VRS  |  Email |Print

Rising global scarcity of resources – metals, minerals and energy – that an ever-increasing human population uses every day to sustain its unsustainable lifestyle, has been the most important topic since the burst of the dotcom bubble in 2000. The reason is simple: we live on a planet with a distinctly finite resource base and a rapidly growing population.
For over the last twelve years supply has struggled to keep pace with demand. Yet we experience a collective breakdown among junior miners of epic historical proportions. Confused investors have been questioning their portfolio strategies and have withdrawn their money from “value in the ground” to re-invest it into scarily overvalued internet companies with questionable earnings and even more precarious business models built on promises of more bites and bytes………………………………………..Full Article: Source

Precious metals: Industrial demand revival to turn silver into gold

Posted on 07 October 2014 by VRS  |  Email |Print

Silver may be the new gold. The reason is prices have fallen sharply compared to gold. As a result, the gold/silver ratio has risen to a five-year high. The ratio shows the ounces of silver you can buy with one ounce of gold. At present it is around 71, previously seen five years ago. A high ratio means silver is undervalued compared to gold and will fall much less versus gold, or when prices increase silver will rise faster.
In three months beginning June, international gold prices have fallen 8.8 per cent to $1211 an ounce while silver has fallen 19 per cent to $17.02 an ounce. The ratio increased from 63 to 71 in just three months………………………………………..Full Article: Source

We may be at the start of a commodity uptrend

Posted on 06 October 2014 by VRS  |  Email |Print

During this time, commodity performance was relatively weak. Finally, in 2013, commodities started to see shortages again. That continued through the second quarter of 2014 and performance made a comeback. However, since July, a combination of perfect weather for grains and fewer oil supply disruptions have built up inventories in several major commodities.
Precious metals have been down on decent retail sales in the US, but may strengthen, depending on Russia-Ukraine tensions. Also, gold, after having dropped significantly in the last one month, seems attractive to China for the mid-autumn festival and to India ahead of the Dhanteras and Diwali festivals in addition to the wedding season. Industrial metals is the only sector that has held strong, mainly from supply constraints and strategic stockpiles………………………………………..Full Article: Source

Robots replace humans in mines as commodity slump forces cost cuts

Posted on 06 October 2014 by VRS  |  Email |Print

Major mining firms could have converted around 40pc of their machinery to operate autonomously by the end of the decade. The world’s biggest mining companies are poised to aggressively slash production costs and introduce more automation into their most productive pits as slowing demand in China threatens to force almost a third of the industry out of business.
Experts expect that the major mining companies could have converted around 40pc of their machinery to operate autonomously by the end of the decade as high-tech robots and drones replace humans in a drive to maintain the bottom line and operating profits………………………………………..Full Article: Source

China Slowdown Cools Commodities

Posted on 03 October 2014 by VRS  |  Email |Print

China’s economic chill has sent shivers down the spine of the global resources industry. With prices of coal, iron ore and other commodities tumbling and mines shutting down, Beijing’s move to curb lower-quality imports has not helped sentiment, although many miners remain upbeat.
On Tuesday, coal miners in Australia’s resource-rich state of Queensland awoke to yet another mine closure, with Japan’s Sumitomo Corporation confirming it was placing the Isaac Plains mine near Moranbah on “care and maintenance” with plans to cease operations by January………………………………………..Full Article: Source

IMF calls for more global growth

Posted on 03 October 2014 by VRS  |  Email |Print

The head of the International Monetary Fund (IMF) has urged new momentum to fuel global economic growth that has recovered slower than expected. Christine Lagarde, the IMF managing director, said on Thursday that the main job now is to help the global economy shift gears and overcome what has been so far a disappointing recovery - one that is brittle, uneven and beset by risks.
“Yes there is a recovery but as we all know, and can all feel it, the level of growth and jobs is simply not good enough. The world needs to aim higher and try harder, to do it together and be country-specific,” Lagarde told an audience of mostly students and faculty at Georgetown University in Washington………………………………………..Full Article: Source

Fracking Revolution: U.S. Replaces OPEC as World’s “Swing Producer”

Posted on 02 October 2014 by VRS  |  Email |Print

After reviewing the numbers from America’s oil and gas patches, Per Magnus Nysveen of Rystad, an international oil consultancy in Norway, declared that the United States is now taking on the role of “swing producer” that used to be played by Saudi Arabia and other members of OPEC, the oil producers’ cartel.
Those numbers are impressive. Fracking technology has led to a 65-percent increase in U.S. crude oil output in just the last six years and, according to Wood Mackenzie, another highly regarded energy consultancy firm: “The shale industry is just starting out; it is not even a teenager yet…. There is still plenty of room for growth.”……………………………………….Full Article: Source

Investors Head for Exit as Commodities Extend Slump

Posted on 01 October 2014 by VRS  |  Email |Print

Investors are betting that the worst isn’t over for commodity prices that already are the lowest in five years. About $907 million was pulled from U.S. exchange-traded products backed by raw materials this month, the most since April, data compiled by Bloomberg show.
Expanding surpluses, a surging dollar and slowing growth in China helped send the Bloomberg Commodity Index to the lowest since 2009, reversing first-half gains fueled by a polar vortex and dead pigs in the U.S., and escalating tensions in Ukraine and the Middle East………………………………………..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

Can Precious Metals Have A Solid Last Quarter In 2014?

Posted on 01 October 2014 by VRS  |  Email |Print

Spare a thought for gold and silver, the assets left behind in a summer of gung-ho action for several indices, currencies and shares. A bad 2013 has now been consolidated, with growth in the spring months reversed and gold headed perilously close to a new low for the year (hit on January 1st).
For silver, the picture is even worse and at $1840 the metal is (at time of writing) at its lowest point for over four years. Overall, gold is down over 25% from the beginning of last year, and silver 40%; they have dropped 8% and 16% respectively since July 1. And this bad run of form has come during a summer filled with events that would traditionally have been a boon for safer investments………………………………………..Full Article: Source

Russia is making a comeback on the global rare earth metals market

Posted on 01 October 2014 by VRS  |  Email |Print

In the next three years, the Urals will launch production using new technology to extract rare earth metals from uranium ore. Scientists expect the project to help Russia return to a market that not so long ago was completely dominated by China.
Scientists from the Ural Federal University have developed a unique technology to extract rare earth metals from uranium ore. Their scientific acumen lies in the creation of a sorbent that makes the extraction possible. Pilot production will be set up using this technology in the near future. According to the scientists, this will slash the Russian market’s need for rare earth metals by a third, reduce the dependence of many industrial sectors on imports and put pressure on China, which has a monopoly on the world rare earth metals market………………………………………..Full Article: Source

Rising political risk could lure commodity investors

Posted on 30 September 2014 by VRS  |  Email |Print

Commodities may be out of favour but the political landscape could change that. The macroeconomic environment and the outlook for the geopolitical landscape will often dictate whether investors flock to perceived safe haven assets such as gold. Geopolitical tensions have been escalating in recent months in Ukraine and Russia, as well as in the Middle East, while the Scottish referendum created some uncertainty in the markets.
Meanwhile, central banks continue to diverge when it comes to monetary policy. In spite of all these factors, investors have turned their backs on precious metals, leaving gold out in the cold………………………………………..Full Article: Source

The worrying slide in oil prices and demand

Posted on 29 September 2014 by VRS  |  Email |Print

While the price slide has slowed and some crude oils witnessed a rise due to a sudden and unexpected stock drawdown in the US, analysts still see the price direction as headed downward. The price of Brent oil rose to $97 (Dh356) a barrel on September 25 while the Opec basket of crude oils declined slightly to $94.25 a barrel. The US Energy Information Administration (EIA) now expects oil prices to stay below $100 a barrel until the end of the decade.
The signals that Opec may reduce its production ceiling by 0.5 million barrels a day (mbd) at the next ministerial meeting in November may not be enough to stabilise the market, especially if further declines are seen from now up to the date of the C meeting. If Opec is serious about price maintenance at some level — and thereby arrest further price erosion — it would be a good idea to start now to seek co-operation from other producers………………………………………..Full Article: Source

Falling commodity prices flash warning on widening global divergences

Posted on 26 September 2014 by VRS  |  Email |Print

Global gloom-mongers have something new to worry about – falling commodity prices. The closely watched Bloomberg Commodity index, which tracks 20 commodity prices, has dropped this week to a fresh four-year low.
Tumbling prices for metals, oil and agricultural products fit with a narrative of a slowing China and of growth spluttering in advanced economies, despite exceptional levels of central bank support. It is hard, however, to find anyone in equity, bond or currency markets getting seriously concerned – yet. If anything, the opposite is the case………………………………………..Full Article: Source

Commodity Outliers Attract Investors

Posted on 26 September 2014 by VRS  |  Email |Print

Hedge funds and other money managers are flocking to small markets ranging from cocoa to coffee to cattle that have defied a broader plunge in raw-materials prices. These investors are betting on goods that are seeing demand soar as emerging-market countries become wealthier and their middle classes expand, increasing demand for products such as chocolate and hamburgers.
Investors and economists view demand for these products as less vulnerable to a slowdown in China’s growth. Demand in China for higher-end foodstuffs is still strong, and the ascent of other emerging markets will help alleviate any pullback, they say………………………………………..Full Article: Source

Gold likely to fall further, says Goldman’s Currie

Posted on 26 September 2014 by VRS  |  Email |Print

Goldman Sachs’ Jeffrey Currie says the worst isn’t over yet for gold after prices for the metal erased almost all of this year’s gain. “Risks are significantly skewed to the downside,” said Currie, who told investors to sell last year before gold’s biggest collapse since 1980.
“Much of the support was coming from political uncertainty in Ukraine and what was going on in Middle East,” and those concerns have faded, he said. Currie heads the bank’s global commodities research team. After bullion’s rally in the first half of the year beat gains for commodities, equities and US Treasuries, the metal is heading for its first quarterly decline in 2014………………………………………..Full Article: Source

Best Cure For High Commodity Prices

Posted on 25 September 2014 by VRS  |  Email |Print

During the previous decade, there was lots of buzz about the commodity super-cycle. In my opinion, super-cycles should last at least 20 years. If so, then the latest one in commodities wasn’t so super. I reckon it lasted about 10 years, kicked off by China’s joining the World Trade Organization in December 2001 and starting to peter out when China’s industrial production growth peaked at a record 20.7% on a y/y basis during February 2010.
It was down to 6.9% last month. The proponents of the super-cycle assumed that rapidly growing demand for commodities in China would outstrip supplies for a very long time, pushing prices higher. They did rise for a while. But as they say in the commodity pits, the best cure for high commodity prices is high commodity prices………………………………………..Full Article: Source

Commodities: Cereal excess

Posted on 24 September 2014 by VRS  |  Email |Print

Global grain supplies are soaring, which will cause an eventual slowing of food price inflation. Towering like a missile above the Illinois prairie town of Monticello, the galvanised metal silo that Topflight Grain Co-operative has just added to its storage complex can hold an awful lot of corn: 19,000 tonnes.
Yet after a mild, wet summer – perfect for growing chunky ears of yellow corn – the extra space may not be enough. Derrick Bruhn, Topflight’s grain merchandiser, warns some of it will end up piled high in outdoor mounds as farmers dump their harvests. “It will be difficult to find a place to put everything,” he says………………………………………..Full Article: Source

Commodities warn of correction repeat

Posted on 24 September 2014 by VRS  |  Email |Print

“History is a vast early warning system.” - Norman Cousins. Commodities were once one of the hottest areas to invest in, as China led the super cycle with infrastructure building, increasing demand and investment-driven GDP growth. Much has changed, however, since 2011.
By and large, commodities have been an awful investment with the benefit of hindsight, as a glut overwhelmed the marketplace, combined with slower growth in emerging economies and Europe. From an inter-market analysis standpoint, commodity movement is important to watch as it can provide a sense of whether cost-push inflationary pressures are either rising or falling………………………………………..Full Article: Source

Commodities Funds Soar As Retirement Asset Niche

Posted on 24 September 2014 by VRS  |  Email |Print

The value of commodities funds soared by 45 percent from 2010 to 2012 in 401(k) and defined contribution plans, asset research firm BrightScope disclosed Tuesday using the latest Labor Department data. Despite the surge, these funds continue to be a niche holding for retirement savings, accounting for just over 1 percent ($3.8 billion) of retirement assets.
Pimco was the most popular sponsor of the funds, taking three of the top five places. The company’s Commodity Real Return Strategy Fund retained the No. 1 ranking for the second year in a row with a gain of more than $100 million in retirement accounts, rising to a total of $587 million………………………………………..Full Article: Source

Why Oil Prices Are Dropping Despite Mideast Unrest

Posted on 23 September 2014 by VRS  |  Email |Print

Canada’s oilpatch is basking in an extended sweet spot of sorts. Commodity prices aren’t spiking in a way that’s sure to sink the global economy, nor are they plumbing depths that would force small producers out of business and big players to start tightening their belts and cutting jobs.
The global oil market, however, is changing and nowhere are the signs more evident than the reaction to what’s happening in the Middle East. In the past, military conflicts in the Middle East and the attendant threat of supply disruptions would send oil prices soaring. Today, oil prices are falling even as the region is seemingly unraveling………………………………………..Full Article: Source

Saudi Arabia plays a complicated game with oil prices

Posted on 22 September 2014 by VRS  |  Email |Print

The recent sharp fall in oil prices shows a game within a game. Brent crude has lost nearly US$20 since June to fall below $100 a barrel, its lowest level for two years, even as Saudi Arabia cut 400,000 barrels per day from its production. The Saudis compete against non-Opec producers, while playing both with and against their Opec peers.
Saudi Arabia has a particularly complicated task at the moment. It firstly has to take the lead in deciding on a reasonable overall Opec production level. This never-ending question is one in which it is well versed in answering………………………………………..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

Commodities: Back On A Steady Course‏

Posted on 19 September 2014 by VRS  |  Email |Print

Overall, we are looking for higher global economic growth next year - however, recently worries have emerged that economic growth in China is slowing down. In turn, the acceleration of growth expected in Q3 has failed to materialise and we could see a further decline in growth in Q4.
However, we expect the Chinese government and central bank to keep growth stable next year. Besides the renewed focus on the risk of lower growth in China, the main factor driving commodity markets currently is abundant supplies, in particular in the global energy and grain market. Overall, we expect commodity markets to remain well supplied in 2015. However, low prices may begin to be an issue for producers as they take their toll on profits……………………………………..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

Commodities May Be Bottoming

Posted on 18 September 2014 by VRS  |  Email |Print

There’s been a dramatic collapse in commodities since the April/May timeframe. Grains have gotten absolutely crushed. Corn, wheat, and soybeans all were looking promising earlier in the year and then they got taken to the woodshed. Copper has followed the opposite path, slammed early in the year, then recovered nicely even with the dollar rallying.
Coffee had a massive rally early in the year and has been consolidating since then. Sugar and cotton have both been crushed since April. Precious metals have had a volatile 2014, with two strong rallies and two grinding declines…………………………………….Full Article: Source

Commodities brace for more woe

Posted on 17 September 2014 by VRS  |  Email |Print

Major commodity markets, many already trading near multi-year lows, could face more pressure should the US Federal Reserve fuel fresh gains in the US currency this week, weighing on dollar-priced raw materials. The mere prospect of a climb in US interest rates has lifted the dollar to multi-month highs, and it may rise further if the Fed confirms on Wednesday after its policy meeting that a rate hike may come sooner rather than later.
This would be bad news for commodities, analysts and investors said, due to their strong negative correlation with the US dollar. Precious metals may be the most susceptible, as gold prices in recent days have shown their strongest negative correlation with the dollar in two years, at over minus 0.94, indicating a nearly matching fall in gold as the dollar rises………………………………………Full Article: Source

Can Gold Recover?

Posted on 17 September 2014 by VRS  |  Email |Print

Gold recently fell to its lowest level in seven-and-a-half months as the dollar rose to a 14-month high. Easing tensions in Ukraine and the Middle East also acted as a drag on gold and Silver prices. Investors have been asking the obvious question as to whether gold can recover from here and if a bottom of at least short-term duration is imminent?
Dollar strength has been especially hard on the precious metals of late. Commodity prices in general have been beaten up in recent weeks by the surging U.S. dollar index, as sagging gold and silver prices attest……………………………………..Full Article: Source

Commodities Extend Decline to Lowest Since July 2009

Posted on 16 September 2014 by VRS  |  Email |Print

Commodities rose after touching the lowest level in more than five years on signs demand growth is weakening in China, the biggest consumer of energy and metals, and on speculation U.S. borrowing costs may rise next year.
The Bloomberg Commodity Index of 22 futures dropped as much as 0.4 percent to 120.7641, the lowest level since July 2009, before trading at 121.3571 at 3:41 p.m. in New York. The gauge has lost 3.5 percent in 2014 and is set for a fourth year of decline. Brent crude fell to the lowest in more than two years as corn and soybeans traded near 2010 lows………………………………………..Full Article: Source

Commodities Fall to 5-Year Low With Plenty of Supplies

Posted on 12 September 2014 by VRS  |  Email |Print

Commodities fell to a five-year low on speculation abundant supplies and slowing economic growth outside of the U.S. will curb demand for raw materials. The Bloomberg Commodity Index declined to the lowest since July 2009. Brent oil traded at the cheapest since 2012, wheat, corn and soybeans retreated to four-year lows, and gold slumped to a seven-month low.
Weak economic growth in Europe and Japan is leading to lower energy prices and interest rates in the U.S. at a time when the U.S. corn crop is a record high and U.S. oil production is poised to be the most in 45 years………………………………………..Full Article: Source

Commodity prices slip on waning global appetite

Posted on 12 September 2014 by VRS  |  Email |Print

Commodity prices are falling, the second time around in 2014. In the current quarter, till date, the Thomson Reuters CRB Commodity Index, a broad indicator, has declined by 7.7%. A similar indicator, the S&P GSCI Index, has fallen by 10.4%. What has contributed to this fall? Food prices are a reason. On Thursday, the UN’s Food and Agriculture Organization said its food price index fell to 196.6 points in August, a level last seen in September 2010.
The index fell by 3.6% over July. Surplus conditions in commodities such as cereals (except rice), dairy products, sugar and oils have contributed to this decline. Crude prices have seen a sharp decline in recent months, with Brent crude prices down by 12.7% in a three-month period. The Dow Jones Commodity Index–Energy has declined by 12.3% in this period. Coal prices also continue to decline, though the degree is lower as they have been falling for a much longer period………………………………………..Full Article: Source

Global Food prices continue to delcine on good weather, harvests

Posted on 12 September 2014 by VRS  |  Email |Print

FAO’s monthly food price index registered another drop in August, continuing a 5-month downward run and reaching its lowest level since September 2010. The index’s August average of 196.6 points represents a decrease of 7.3 points (3.6 percent) from July. With the exception of meat, prices for all of the commodities measured by the index dipped markedly.
Dairy led the pack, with FAO’s sub-index for dairy products averaging 200.8 points in August, down 25.3 points (11.2 percent) versus July and 46.8 points (18.9 percent) compared to a year ago — the result of abundant supplies for export coupled with reduced import demand………………………………………..Full Article: Source

Commodities send worrying signal

Posted on 11 September 2014 by VRS  |  Email |Print

Bulls of growth-focused assets may care to consider some signals from the commodity sector. Early on Wednesday, Brent crude dropped below $99 a barrel for the first time since May 2013; Tokyo-traded rubber prices hit a five-year trough; China-based steel rebar futures for January delivery hit a contract low; and, before recovering into the close, the Dalian Commodity Exchange’s January iron ore price also fell to a record low.
These are products with a high sensitivity to perceived industrial and construction activity in China, source of a high proportion of expected global growth………………………………………..Full Article: Source

Commodities suffer as dollar accelerates

Posted on 08 September 2014 by VRS  |  Email |Print

Weakness across the commodity space resumed this week with the broad-based Bloomberg Commodity index falling by more than 1 percent. Multiple factors drove the weakness, not least the continued surge in the dollar, which gathered additional momentum following the intervention on rates and bonds from the European Central Bank on Thursday.
The announcement by Mario Draghi that the ECB had cut rates to a record low, while pledging to buy hundreds of billions of bonds to support the Eurozone, triggered a major move in the dollar, with the euro falling to a near 14-month low against the greenback. Given the dollar’s adverse relation to dollar-denominated commodities, the impact was felt across all sectors……………………………………….Full Article: Source

OPEC Exports Drop on U.S. Shale

Posted on 08 September 2014 by VRS  |  Email |Print

“I know Putin is a hot topic right now, but oil exports from Russia have no effect on us. What about the big players like Saudi Arabia?” writes Sheldon, a concerned Energy and Capital reader. He emailed his query after reading this week’s columns from both me and Jeff Siegel on Russia, the civil war in Ukraine, and their bearing on the Chinese and European energy sectors.
And while Putin is attempting to harness control over two continents, Sheldon’s email got me thinking more broadly about U.S. oil and our evolving relationship with the Organization of Petroleum Exporting Countries (OPEC)………………………………………..Full Article: Source

Outlook turns bleak for gold

Posted on 08 September 2014 by VRS  |  Email |Print

The easing of tension in Ukraine, the stimulus announced by the European Central Bank (ECB) and the subsequent strength in dollar have worked to the disadvantage of gold. The yellow metal cut its key support at $1,260/ounce and fell to a low of $1,257 last week.
But as the US jobs data released on Friday was not as strong as expected, the metal recovered slightly and closed at $1,268.8/ounce, down 1.4 per cent for the week. The US non-farm payroll report showed that 1,42,000 jobs were added, lower than the street’s expectations of 2,25,000 jobs………………………………………..Full Article: Source

Can Gold And Silver Ever Make A Full Recovery?

Posted on 08 September 2014 by VRS  |  Email |Print

The bear market in gold, silver and mining shares continues as we start the month of September. We have recent calls from investment banks for ever lower prices, perhaps more a symbol of how out of favor this sector is, than any accurate comment on future values. We also have news this week pointing towards more monetary easing in Europe at the same that (supposedly) central bankers in the US are going to be able to begin tightening.
Other apparently bullish news for the US economy and its currency comes from those calling for an age of American energy independence. While the greenback has hardly exhibited the kind of bullish moves higher one would expect during a secular bull market in stocks (the dollar is basically stuck in the same range as that of the last 6 years), hope springs eternal for those bulls who want to make the case that a new era of a strong dollar is going to be the final nail in the coffin for the precious metals………………………………………..Full Article: Source

banner
November 2014
S M T W T F S
« Oct    
 1
2345678
9101112131415
16171819202122
23242526272829
30