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Commodities Briefing - Category | Performance more

Gold wins from Brexit. But other commodities lose

Posted on 27 June 2016 by VRS  |  Email |Print

Gold prices soar, but many commodities will suffer from the ripple effects of the referendum. Goldbugs are natural Brexiteers; intensely suspicious of large bureaucracies like the European Union and avid conspiracy theorists when it comes to the power of global “elites”. They had double reason to celebrate on June 24th, when Britain’s decision to leave the EU sent gold prices soaring.
But the rise of the yellow metal is also a symptom of the fear that Brexit is unleashing on the global economy. Hence other commodities that are more dependent upon global demand, such as oil, fell sharply. After a huge rally since their trough earlier this year, the commodities markets were vulnerable to a shock. Hedge funds and other money managers had built up big bets on rising prices………………………………………..Full Article: Source

ETFs/ETPs In Europe Gathered $2.68 Billion In Net New Assets In May 2016

Posted on 14 June 2016 by VRS  |  Email |Print

ETFGI the leading independent research and consultancy firm on trends in the global ETF/ETP ecosystem, today reported ETFGI reports ETFs/ETPs in Europe gathered US$2.68 billion in net new assets in May marking 20 consecutive months of positive net inflows, according to preliminary data from ETFGI’s May 2016 global ETF and ETP industry insights report.
Record levels of assets invested in ETFs/ETPs were reached at the end of May for ETFs/ETPs listed globally at US$3.143 trillion, in the United States at US$2.229 trillion and in Japan which reached US$147 billion. At the end of May 2016, the European ETF/ETP industry had 2,219 ETFs/ETPs, with 6,927 listings, assets of US$530 Bn, from 52 providers listed on 25 exchanges in 21 countries………………………………………..Full Article: Source

Investments in Commodity, Fixed Income ETFs Hit Record High

Posted on 14 June 2016 by VRS  |  Email |Print

In May, U.S.-listed funds gathered net inflows of $3.3 billion, with the biggest gainers commodity ETFs/ETPs. Assets invested in exchange-traded funds and products listed in the U.S. hit a new record high $2.23 trillion at the end of May, ETFGI reported.
The U.S. sector had 1,902 ETFs/ETPs from 96 providers listed on three exchanges. ETFGI also reported record levels of assets invested in globally listed ETFs/ETPs, $3.14 trillion, and in Japan, $147 billion………………………………………..Full Article: Source

Commodity Funds Outperform for First Time in Years

Posted on 14 June 2016 by VRS  |  Email |Print

Year-to-date gains in core commodity indexes are two to three times the gains in broad U.S. bond and stock indexes. For the first time in years, commodities are doing something they haven’t done in a while: They’re outperforming major asset classes like stocks, bonds and real estate.
After several years of consecutive annual losses for major commodity benchmarks, a turnaround in the beleaguered group appears to be in the works. Since the start of the year, the Thomson Reuters/CoreCommodity CRB Index (CRY) has climbed 9.5% in value compared to a gain of just 3.6% for the total U.S. stock market (VTI), 4.4% for the total U.S. bond market (BND) and 7% for global real estate equities (REET)………………………………………..Full Article: Source

Commodities Slightly Decreased in May due to Fundamental Factors

Posted on 10 June 2016 by VRS  |  Email |Print

Commodities slightly decreased in May, driven by supply factors and macroeconomic events, according to Credit Suisse Asset Management. The Bloomberg Commodity Index Total Return performance was slightly negative for the month, with 11 out of 22 Index constituents posting losses.
Industrial Metals was the worst performing sector, down 7.27%, with all sector commodities yielding negative returns, as demand concerns out of China persisted. Supplies also remained ample, broadly weighing on base metals. Precious Metals declined 7.07%, led lower by Silver, amid a strengthening U.S. Dollar and Chinese industrial demand concerns. (Press Release)

Zinc may remain shining star among base metals

Posted on 10 June 2016 by VRS  |  Email |Print

Zinc prices has surged as much as 25 percent in 2016 to the highest since July as miners supply less of the ore concentrate that’s refined to produce the metal, just as demand rebounds in China, the biggest user. It has emerged as the best performing metal this year.
Prices for the metal rose past Rs 135 per kg on June 3, their highest level in almost 10 months. This defies a slump in commodities from copper to iron ore and nickel, which have continued to fall over the past month amid concerns about growth in China………………………………………..Full Article: Source

Commodities Rally Looks Strong and Broad on the Charts

Posted on 09 June 2016 by VRS  |  Email |Print

It’s not just gold and oil: Agricultural products are on the rise. Even Deere and DuPont are up. Not many individual investors have experienced trading in the commodities pits, but they should pay attention to what is happening there right now. Commodities from sugar to soybeans look quite strong, and that is giving commodities-related stocks a boost, too.
You don’t have to have conviction on pork-belly futures to participate. The PowerShares DB Agriculture fund holds positions in a broad array of agricultural commodities, and after a choppy May it erupted higher two weeks ago……………………………………….Full Article: Source

Actually, Gold Can Provide Income: Here’s the Trade

Posted on 09 June 2016 by VRS  |  Email |Print

As gold stocks surge, this options trade lets investors pocket income as long as prices don’t fall. Gold, which defies traditional valuation metrics, keeps attracting buyers in anticipation of further gains. This is incredible because stocks, which can be valued based on cash flow, are dancing around record highs and it’s hard to find anyone who is confident about the near-term future.
But the SPDR Gold Trust , even though it is up some 14% this year in what appears to be a knee-jerk reaction to simmering fears that the world economy is in bad shape, is in a full-fledged bull market. ……………………………………….Full Article: Source

Commodities are the best performing asset class.

Posted on 07 June 2016 by VRS  |  Email |Print

After years of disappointment, evidence that some investors are again seeking broad exposure. Here’s an unfamiliar phrase: commodities are the best performing asset class. Yes, it’s true. In the year 2016, total returns from the Bloomberg Commodity Index are over 11 per cent. Compare that to global bonds, at about 6 per cent, and global equities at just over 2 per cent.
The index has pushed higher thanks to components such as oil, gold, soyabeans and zinc. On Monday, the benchmark was up 21 per cent from its January low, entering a bull market. It is the strongest start to any year since the notorious commodities price spike of 2008………………………………………..Full Article: Source

Commodity hedge funds get $5b embrace on oil gain

Posted on 06 June 2016 by VRS  |  Email |Print

The rally in oil has given a fillip to long-suffering commodities hedge funds. After four years of haemorrhaging cash and clients, managers are once again making money and winning back investors. About $5 billion has coursed into the funds in 2016, with the first quarter seeing the biggest inflows since 2009, according to data compiled by eVestment.
Investors are being drawn by gains such as the more than 18 per cent increase reported in a letter to clients by Stuart Zimmer’s ZP Energy Fund in New York and the 12.7 per cent posted by oil trader Pierre Andurand’s $1.1 billion Commodities Master Fund in London. Officials at the funds declined to comment………………………………………..Full Article: Source

Commodities return best three months since 2009

Posted on 06 June 2016 by VRS  |  Email |Print

Commodities have enjoyed their biggest three month gain since 2009, according to a note from S&P Dow Jones Indices. The S&P GSCI (formerly Goldman Sachs Commodity Index) has seen a total return of 9.8% this year-to-date, with commodities now outperforming stocks for the first year since 2007.
While not every broad commodity index has performed as strongly as the S&P GSCI, which is weighted by world production and significantly energy sector-heavy, 2016 has seen a rebound in most commodities from their five-year trend, providing benefits to investors in a range of exchange-traded funds linked to these indices………………………………………..Full Article: Source

Global commodity assets rise to $220 billion in April: Barclays

Posted on 02 June 2016 by VRS  |  Email |Print

The total value of commodity assets held by fund managers globally rose in April to $220 billion, up 14 percent from the month before to reach the highest level in a year, analysts at Barclays said in a note.
Precious metals accounted for 50 percent of total assets under management (AUM) at $110 billion, followed by energy at $58 billion, said the note published on Tuesday, which cited an analysis of data from financial information suppliers including Reuters as well as Barclays’ own research. ……………………………………….Full Article: Source

India Inc Modified?

Posted on 23 May 2016 by VRS  |  Email |Print

While the Modi government had its hits and misses, India Inc has found the going quite tough over the last two years. This was mainly due to several external factors. One, slowing global growth resulted in exports consistently trending lower. This impacted sectors such as information technology, pharmaceuticals and auto and auto component makers.
Two, global overcapacity and slowing imports from China made commodities dive sharply. The Thomson Reuters core commodity index that tracks the movement of major commodities is down 40 per cent since Modi took charge. Crude oil has been at the epicentre of this commodity meltdown, losing around 55 per cent. Three, new investments in the country slowed down due to over-leveraged balance sheets of companies in the power, steel and infrastructure sectors and over-capacity in some sectors………………………………………..Full Article: Source

Kuwait Says Oil Near $50 Shows OPEC’s Strategy Is Working

Posted on 19 May 2016 by VRS  |  Email |Print

OPEC’s strategy to defend market share over prices is working as oil approaches $50 a barrel amid rising demand and declining output from producers including U.S. shale companies, Kuwait’s acting oil minister said.
Oil will end the year at $50 a barrel and the market will rebalance in the third or fourth quarter of the year, Anas Al-Saleh, the acting oil minister, said in an interview Wednesday in Kuwait City. Demand is growing and about 3 million barrels a day of crude supply have been lost due to a drop in global production, he said………………………………………..Full Article: Source

Commodities Increased in April due to Positive Fundamental Factors

Posted on 12 May 2016 by VRS  |  Email |Print

Commodities increased in April, driven by positive supply factors and macroeconomic events, according to Credit Suisse Asset Management. The Bloomberg Commodity Index Total Return performance was positive for the month, with 18 out of 22 Index constituents posting gains.
Credit Suisse Asset Management observed the following: Energy was the best performing sector, up 13.43%, led by Brent and WTI Crude Oil. Precious Metals gained 7.26%, led by Silver, amid a weakening U.S. Dollar after the U.S. Federal Reserve left interest rates unchanged. Industrial Metals increased 7.18%, led by Nickel. Agriculture gained 7.03%, led by Soybean Meal, as excessive heavy rains in Argentina caused the harvest to be significantly delayed, reducing the production outlook for soybean meal and soybeans. (Press Release)

Commodities are roaring back

Posted on 04 May 2016 by VRS  |  Email |Print

Bloomberg Commodity Index (BCOM) April 2016: Commodities are roaring back and investors are taking note. Soybeans entered a bull market on bad weather in South America. Silver prices have rallied more than any other metal this year after three straight annual losses.
Iron ore jumped above $70 a metric ton and copper is near a one-month high on signs of improving Chinese demand. Vietnam drought boosted coffee prices. Oil is trading near levels not seen in five months as U.S. output dropped to the lowest since October 2014. Put it all together, and the Bloomberg Commodity Index, a measure of returns for 22 commodities, jumped 8.5% in April - the biggest monthly gain since December 2010………………………………………..Full Article: Source

Commodities return to their winning ways as global gluts wane

Posted on 02 May 2016 by VRS  |  Email |Print

The global gluts that have plagued markets from crude oil to zinc are finally starting to subside, sending commodities to their biggest monthly gain since December 2010. The Bloomberg Commodity Index, a measure of returns for 22 components, climbed as much as 1.1% on Friday to the highest since November.
The gauge climbed 8.5% in April, beating returns for indexes of global equities, highyield and investment grade, bonds, Treasuries and all major currencies. Oil in New York posted the biggest monthly gain in a year, and gold reached the highest in more than a year. The brighter picture for raw materials comes as the economy stabilises in China, the world’s top consumer of metals, grains and energy………………………………………..Full Article: Source

Commodities Increased in March due to Positive Fundamental Factors

Posted on 13 April 2016 by VRS  |  Email |Print

Commodities increased in March, largely driven by decreasing supply expectations and weather fundamentals supporting the energy and agriculture sectors, according to Credit Suisse Asset Management. The Bloomberg Commodity Index Total Return performance was positive for the month, with 17 out of 22 Index constituents posting gains.
Energy was the best performing sector, up 7.84%, led by Brent Crude Oil, due to reports of an upcoming meeting in April among OPEC and non-OPEC nations to discuss a potential cap on production. Natural Gas increased due to continued production declines, which helped improve the outlook for the supply and demand balance. In addition, an unusual cold snap in the U.S. Northeast at the beginning of spring improved demand expectations. (Press Release)

Kiwi commodities slip in March as dairy sours

Posted on 06 April 2016 by VRS  |  Email |Print

After flirting with recovery in February, New Zealand’s commodities sector took a tumble last month as dairy prices fell further. The basket of commodities tracked by ANZ fell 1.3 per cent in March in US dollar terms, taking a turn for the worse following revised growth of 0.5 per cent in February, adjusted from 0.4 per cent.
Economists had forecast 0.4 per cent growth for the index, and while beef prices saw gains of 3.1% from the previous month, prices for dairy, New Zealand’s, biggest export sector, plummeted 4.5 per cent, with seafood prices piling on more pain with a fall of 1.6 per cent………………………………………..Full Article: Source

Commodities Outlook: Best and Worst Performers (Video)

Posted on 01 April 2016 by VRS  |  Email |Print

Oil declined as rising U.S. crude stockpiles kept supplies at the highest level in more than eight decades. Copper dropped for a fifth day, the longest losing streak since January, amid growing scepticism about demand in China. Most other metals traded lower in London.
However, gold headed for the biggest quarterly advance since September 1990 as demand for haven assets surged to make the metal one of this year’s best performing commodity. BNP Paribas Global Head of Equity Derivative Strategy Edmund Shing discusses commodities with Bloomberg’s Kenneth Hoffman. They joined Anna Edwards on “Countdown.”……………………………………….Full Article: Source

Best March For Commodities In 10 Years

Posted on 01 April 2016 by VRS  |  Email |Print

In the first half of March, the S&P GSCI Total Return had added 9.6% and staged its biggest comeback ever, gaining 18.8% from its bottom on January 20, 2016. Unfortunately, the index gave up 4.3% since March 17, 2016, losing about half its March gain.
Despite the loss, the index posted its first positive monthly gain of 4.9% (data ending March 30, 2016) since October 2015. March’s commodity return is historically big, and is the biggest March since that in 2006, when the index gained 5.1%………………………………………..Full Article: Source

How commodities will perform in the fortnight ahead

Posted on 22 March 2016 by VRS  |  Email |Print

On a fortnightly basis, global equity markets traded on a mixed as markets discounted the dovish move by the US Federal Reserve who cut its projection for the number of 2016 rate hikes from four to two. The committee also noted that the recent global economic and financial developments have been hampering the economy of the United States which prompted them to leave the borrowing rates unchanged.
Moreover, fear of deflation prompted the European Central Bank President Mario Draghi to introduce a new round of monetary policy easing programme. The ECB raised monthly asset buys to 80 billion Euros from 60 billion Euros and cut its main refinancing rate to zero from 0.05 percent………………………………………..Full Article: Source

Commodity prices edge up in Feb

Posted on 02 March 2016 by VRS  |  Email |Print

The decline in Australia’s export commodity prices was interrupted in February. Commodity prices rose by 1.2 per cent in foreign currency terms in the month, figures from the Reserve Bank of Australia show. The increase in February was driven by gold and iron ore prices, although base metals and rural goods also rose in February, the RBA said.
Despite the small rise, which followed a 0.7 per cent drop in January, the RBA’s commodity price index was still down by 22 per cent from a year earlier and by 55 per cent from the peak in mid-2011………………………………………..Full Article: Source

Gold evolves from a ‘barbaric relic’ to biggest winner of 2016

Posted on 01 March 2016 by VRS  |  Email |Print

Gold’s comeback is dominating 2016. The precious metal is the year’s best-performing major asset. Its 16 per cent gain is topping gauges of high-yield and investment grade bonds, Treasuries, all currencies and major stock indexes in developing and emerging countries.
Turmoil across global equity and currency markets has sparked demand for a haven. Speculators raised their net-long position in gold to the highest in a year. SPDR Gold Shares, the world’s largest bullion exchange-traded fund, attracted $4.5 billion of new money in 2016, the most among all US-listed ETFs, according to Bloomberg data as of Feb. 25………………………………………..Full Article: Source

Crash in commodity prices takes a toll on Canada’s corporate giants

Posted on 25 February 2016 by VRS  |  Email |Print

Two of Canada’s largest companies clarified Wednesday exactly how much the ongoing crash in crude oil prices has cut into their bottom lines. Royal Bank of Canada missed expectations for first quarter profit as a result of more provisions being set aside for potentially bad loans to oil and gas producers.
Encana, meanwhile, actually beat quarterly expectations despite reporting a net loss of more than $600-million along with plans to cut its dividend by nearly four fifths and its workforce by 20 percent; equating to several hundred layoffs. “There is no question that persistently low oil prices are tough for our clients in affected regions,” RBC chief executive Dave McKay said……………………………………….Full Article: Source

How the commodities crash is wiping out corporate promises on dividends

Posted on 22 February 2016 by VRS  |  Email |Print

The whole idea of “progressive” dividends – the corporate promise to keep dividends intact or, better yet, boost them every year – was always a risky idea, but one that still seduced income-craving investors. They piled into dividend-heavy shares and rode the wave. Now they’re paying the price. Dividends doled out by the big resources companies are getting slaughtered as prices for everything from oil to copper sink.
More dividends are to be sent to the knacker’s yard. The dividend yield of BHP Billiton, the world’s biggest mining company, is a lofty 11 per cent, the result of a 50 per cent fall in the share price in the last year. How much longer can BHP’s payout last? Not long, is the market’s guess, as the “stronger for longer” theory that had convinced investors commodity prices would stay high forever proves a myth………………………………………..Full Article: Source

Biggest Banks’ Commodity Revenue Slid to Lowest in Over a Decade

Posted on 22 February 2016 by VRS  |  Email |Print

Revenue from commodities at the largest investment banks sank to the weakest in more than a decade last year, laid low by a rout in prices for everything from metals to gas. Income at Goldman Sachs Group Inc., Morgan Stanley and the 10 other top banks slid by a combined 18 percent to $4.6 billion, according to analytics firm Coalition Ltd.
That was the worst performance since the London-based company began tracking the data 11 years ago, and a slump of about two-thirds from the banks’ moneymaking peak in 2008. Revenues are unlikely to return to the heights of $14.1 billion seen at the top of the market, according to George Kuznetsov, head of research at Coalition………………………………………..Full Article: Source

India’s GDP to grow at 7.5% in 2016, 2017: Moody’s

Posted on 19 February 2016 by VRS  |  Email |Print

Indian economy will grow at 7.5% in 2016 and 2017 as it is relatively less exposed to external headwinds, like China slowdown, and will benefit from lower commodity prices, Moody’s Investors Service said.
The firm, however, warned that the generally robust economic environment is constrained by “banks’ balance sheet repair and elevated corporate debt” and corporate pricing power being limited by the impact on food price inflation and households budgets of two consecutive droughts………………………………………..Full Article: Source

History of OPEC oil production changes

Posted on 19 February 2016 by VRS  |  Email |Print

The following are changes in oil output limits by the Organization of the Petroleum Exporting Countries, dating from efforts in the late 1990s to prop up prices. Three OPEC countries - Saudi Arabia, Qatar and Venezuela - plus non-OPEC Russia, agreed on Tuesday to freeze output but said the deal was contingent on other producers joining in.
OPEC does not currently have a production target. At its December 2015 meeting, the group scrapped the previous limit of 30 million barrels per day (bpd) that had applied to all of its then 12 members for four years. There are now 13 OPEC countries. Indonesia reactivated its OPEC membership at the same December 2015 meeting………………………………………..Full Article: Source

How the world’s great oil powers became so powerless

Posted on 18 February 2016 by VRS  |  Email |Print

Every day, supertankers carrying two million barrels apiece sit idle, in hopes that the price of oil one day will rise again. To get a sense of how much more oil the world has than it needs, look to the world’s oceans. Every day, supertankers carrying two million barrels apiece sit idle, in hopes that the price of oil one day will rise again.
Or look at the line of ships being turned away from ports at the Gulf of Mexico, the North Sea and everywhere in between. Increased demand for oil is unlikely, given the slowing of China’s manufacturing machine………………………………………..Full Article: Source

Global gold demand was flat in 2015

Posted on 12 February 2016 by VRS  |  Email |Print

Global gold demand was broadly unchanged last year, but a fall in supply could be positive for the market going forward, said the World Gold Council Thursday. Demand in China, one of the biggest buyers of the precious metal, also fell, in another sign of that country’s fragile economic state. Overall, a surge in demand in the second half of the year countered a lackluster first half.
Total demand in 2015 weighed in at 4,212.2 tons, compared with 4,226.4 tons the previous year, according to the industry body’s most recent Gold Demand Trends report. However, gold demand growth rose toward the end of the year–fourth-quarter demand was 1,117.7 tons, up 4% from the same period a year earlier………………………………………..Full Article: Source

Baltic index slips further, hits new record low

Posted on 11 February 2016 by VRS  |  Email |Print

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, extended its record decline for the 12th straight session on Wednesday due to concerns about demand. The Baltic dry index is down about 98 percent from its peak of 11,793 points in May 2008, marking the lowest level since the records began in 1985.
The overall index, which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertiliser, fell by 1 point to 290 points. The dry bulk market is expected to remain under pressure for longer because of weak demand for commodities, particularly from top global importer China………………………………………..Full Article: Source

U.S. Farm Income Will Drop for Third Year in Commodity Slump

Posted on 10 February 2016 by VRS  |  Email |Print

The U.S. Department of Agriculture forecast that farmers will face a drop in profit for the third straight year as persistent surpluses depress crop and livestock prices. Farm net income will be $54.8 billion in 2016, the USDA said Tuesday in a report on its website, 2.8 percent less than the $56.4 billion estimated for 2015.
The hard times follow an era of record profit that peaked at $123.3 billion in 2013, when rising global demand combined with a domestic drought that crimped supplies of corn and cattle, while a virus devastated hog herds. Direct government farm-program payments are forecast to rise 31 percent to $13.9 billion in 2016 with the 2014 Farm Bill’s price-loss and risk coverage accounting for almost two-thirds of the total………………………………………..Full Article: Source

S&P turns negative on 20 oil and gas companies

Posted on 04 February 2016 by VRS  |  Email |Print

Standard and Poor’s said Tuesday it had cut or was considering cutting the investment-grade credit ratings at 20 oil and gas giants, including Chevron Corp. and Exxon Mobil Corp. The ratings actions, which spanned integrated and independent producers, are an acknowledgement that $30 oil could shake the creditworthiness of even the largest oil and gas companies.
Chevron’s credit rating was cut one notch from AA to AA-. Exxon Mobil, which remains at the agency’s highest credit rating of AAA, was put on notice that its long-term credit rating was up for review………………………………………..Full Article: Source

Why January’s Commodity Performance Is Promising

Posted on 03 February 2016 by VRS  |  Email |Print

Considering commodities were on pace to set the worst January since 1975 at one point, down 14.3% by January 20, the final monthly loss of just 5.2% is impressive. The S&P GSCI Total Return rebounded 10.6%, with nine of the twenty-four commodities posting gains for the month.
Does this mean commodities hit the bottom or that this is just a bounce in a much darker scenario? That probably depends on the oil supply decisions from Saudi Arabia, Russia and Iran, in addition to Chinese demand growth, the strength of the dollar and the weather………………………………………..Full Article: Source

New Zealand Commodity Prices Fall For Third Month

Posted on 03 February 2016 by VRS  |  Email |Print

New Zealand’s commodity prices decreased for the third consecutive month in January, the results of a survey by ANZ showed Tuesday. The ANZ commodity price index dropped 2.3 percent month-over-month in January, which was worse than the 1.8 percent fall in December. The survey showed that prices were stable-to-better for nine of the 17 commodities monitored in January, with eight declining.
“Global commodity prices have started the year on the back foot, driven by falls in oil and industrial metals. Soft commodity price movements and prices in New Zealand’s specific export basket have been more mixed, however, varying with the fundamentals of each sector.” ANZ rural economist Con Williams said………………………………………..Full Article: Source

Australia’s commodity price index is at a decade low

Posted on 02 February 2016 by VRS  |  Email |Print

Prices for Australia’s key commodity exports continued to tumble in January. The latest commodity price index from the Reserve Bank of Australia fell by 2.9% in special drawing rights terms (SDR), largely in response to weakness in iron ore and oil prices.
The decline, following a 3.85% fall in December, left the index down 25.8% from 12 months earlier. From its all time peak of 138.2, struck in July 2011, the index has now fallen by 56% in SDR terms. It now sits at the lowest level seen since October 2005………………………………………..Full Article: Source

Gold And Silver Outperforming Attracting Hedge Funds, Money Managers - CFTC

Posted on 02 February 2016 by VRS  |  Email |Print

After taking a bit of a break, hedge funds and money managers are starting to wade deeper into gold waters, according to the latest data from the U.S. Commodity Futures Trading Commission.
During the week through January 26, which is the period covered in the latest CFTC report, Comex February gold futures rose by nearly more than 3%, pushing back above $1,100 an ounce on the back of short covering and some modest new buying. Currently, April gold futures last traded at $1,126.20 an ounce, up $9.8 on the day………………………………………..Full Article: Source

Hedge Funds Had Worst Year Since 2008 Betting on Commodities

Posted on 26 January 2016 by VRS  |  Email |Print

Hedge funds betting on raw materials had the worst performance since the global financial crisis of 2008 as everything went wrong for commodities. The funds lost 5.2 percent in 2015 and recorded losses in 10 out of 12 months, based on an index compiled by Societe Generale SA that tracks the performance of commodity trading strategies including equities and physical products.
Managers lost money and commodity funds from Trafigura Pte Ltd. to Cargill Inc. closed last year as China’s slowing economy added to the global glut in most raw materials. Losses from poor performance and investor withdrawals left assets at the top 10 commodities hedge funds at less than $10 billion, compared with more than $50 billion in 2008, Trafigura said last month………………………………………..Full Article: Source

China is a $US460 bln a winner from the commodities rout

Posted on 25 January 2016 by VRS  |  Email |Print

The pain from the rout in global commodity prices is sweeping through nations from Brazil to South Africa. The biggest beneficiary? Arguably it’s China, the nation often blamed for driving prices lower due to its slowing economic growth. China’s annual savings from the commodities rout amount to $US460 billion, according to calculations by Kenneth Courtis, former Asia vice chairman at Goldman Sachs Group Inc.
About $US320 billion of that is from cheaper oil, with the rest from other energy, metals, coal and agricultural commodities. Benefits are rippling through the economy, pushing down or steadying prices of everything from home heating and petrol prices to the cost of raw materials at factories. That’s also boosting China’s efforts to recalibrate its economic growth model away from a reliance on heavy industries and investment toward consumption and services………………………………………..Full Article: Source

It’s time to count the winners in the commodity crash, not just the losers

Posted on 18 January 2016 by VRS  |  Email |Print

With oil at prices lower than we have seen for more than a decade, the stock markets down on average 15 per cent in the first 15 days of the year, and commodities at record lows everywhere, it does not take gloomy weather to tell us there is panic in the air.
But as I combed through the global commodities data to try to work out what is going on, I stumbled across one particular chart that amazed me – in the National Geographic of all eccentric places. Innocently enough it traced cement production worldwide since the year 1900………………………………………..Full Article: Source

Don’t expect oil to rebound any time soon

Posted on 15 January 2016 by VRS  |  Email |Print

Get used to low oil prices. They’re here to stay, and may have to fall even further to take out excess supplies. The slump in prices was the global economic story of 2015. They’ve fallen another 20% already this year to around $30 a barrel - a level not seen for about 12 years.
This is having a colossal impact as importers reap the benefits, while dwindling revenues put intense pressure on producers. Oil is a volatile commodity and we’ve been here before. So why is the price collapse different this time?……………………………………….Full Article: Source

The Commodities Crash: A Supply-Side Perspective

Posted on 14 January 2016 by VRS  |  Email |Print

2015 was brutal for commodities. Even worse, they took another plunge at the start of 2016. The Bloomberg Commodity Index, which covers a wide range of natural resources, dropped to its lowest level since June 1999. The collapse in commodity prices happened across the board, from crude oil to iron ore, coal, and industrial metals.
Unfortunately, there is little sign of stability or recovery: Oil and iron ore prices dipped even further in December. As a result, mining stocks took a beating, and ratings on mining bonds were downgraded. Weakening demand from China receives most of the blame for the tumbling prices. China was the main driving force behind the rising commodity prices, its fixed-asset investment growing at an average of 25% from 2003 to 2011………………………………………..Full Article: Source

Commodity Returns Fall to Lowest Since at Least 1991 on Oil Rout

Posted on 13 January 2016 by VRS  |  Email |Print

A gauge of returns on raw materials tumbled to the lowest since at least 1991, extending the agony that producers of energy, industrial metals and agricultural commodities faced in 2015. The Bloomberg Commodity Index, a measure of returns from 22 raw materials, fell as much as 1.5 percent to 74.02 on Tuesday.
A roundup of the bearish numbers: Crude oil in New York dipped below $30 a barrel, copper fell to less than $2 a pound and natural gas as low as $2.24 per million British thermal units. The expansion of the global economy has faltered, supplies of everything from oil to copper to grains are ample and a stronger dollar has eroded the appeal of raw materials as alternative investments………………………………………..Full Article: Source

Commodity depression: $1.4trn lost since 2011. M&A the answer?

Posted on 13 January 2016 by VRS  |  Email |Print

The mining sector has been decimated over the past few years with the Bloomberg article below putting the stock losses at $1.4 trillion since 2011. Many investors would see this as a opportunity and the article looks at potential M&A activity for a revival within the sector.
The current scenario sees two classic investment quotes go head to head. On the one hand, as Baron Rothschild was quoted in the 18th century: “Buy when there’s blood in the streets, even if the blood is your own.” And while iconic current day guru Warren Buffett agrees with the concept he doesn’t believe in the commodity space………………………………………..Full Article: Source

Hedge funds post worst annual return since 2011

Posted on 13 January 2016 by VRS  |  Email |Print

Hedge funds in 2015 posted their lowest annual return for four years amid heightened volatility and a weak market, industry data tracker Eurekahedge said on Tuesday. The Eurekahedge Hedge Fund Index fell 0.58 percent in December while the MSCI World Index declined 2.23 percent, Eurekahedge said, giving hedge funds an average annual performance of 1.56 percent.
“Returns across hedge fund strategic mandates were disappointing during December with most finishing the month in negative territory,” Eurekahedge said. “In particular, long positions into European equities suffered losses as ECB’s early December meeting proved to be a disappointment for investors leading to a slump in European equities,” it said………………………………………..Full Article: Source

Commodity Funds Fall Short, Study Says

Posted on 12 January 2016 by VRS  |  Email |Print

Sobering news for investors in specialty-commodity mutual funds: On average, they fall short on key measures, new research has found. “These categories of funds have not been able to consistently create positive net alphas for their investors over longer time periods,” the report states. Alpha is a measure of the value fund managers add to the investment process when adjusted for risk factors such as volatility.
The funds’ high expenses are often to blame, according to the report by Srinidhi Kanuri at the University of Southern Mississippi, Robert McLeod at the University of Alabama and Davinder Malhotra at Philadelphia University………………………………………..Full Article: Source

Oil options lurch closer to $20 Goldman doomsday forecast

Posted on 08 January 2016 by VRS  |  Email |Print

When U.S. investment bank Goldman Sachs said last year that oil could fall as low as $20 per barrel, it assigned a fairly low probability to that scenario. Fast-forward five months and in some parts of the world the forecast has already proved correct. Canadian physical crude has been selling this week at below $20 per barrel, less than it costs to extract and transport.
Traders in the options market, meanwhile, are taking protection against prices falling below $25. The developments reflect growing concerns that a market already awash in too much oil is now suffering the double-whammy of a sharp slowdown in U.S. and Chinese demand………………………………………..Full Article: Source

Low commodities make for an ugly year for emerging markets

Posted on 05 January 2016 by VRS  |  Email |Print

If you live in the West, this year will bring not only the best economic growth since the financial crash, but also a welcome increase in real income for consumers created by lower commodity prices, particularly oil. However, for the emerging economies that produce the commodities, the opposite is true. The past year was a terrible one for them, and this year promises to be even worse. Economic divergence between the rich and poor countries has never been greater.
The European economies should stage something of a recovery, according to the consensus of economic forecasters, driven by the north, notably Germany – although Britain, the EU’s No 2 economy, should still lead the way at 2.3 per cent. Not that……………………………………….Full Article: Source

Oil, commodities worst performers of 2015

Posted on 04 January 2016 by VRS  |  Email |Print

Oil and commodities were the world’s worst-performing asset class for the second year running in 2015. Among currencies, the U.S. dollar was the clear standout. Oil and commodities were the world’s worst-performing asset class for the second year running in 2015, pressured by China’s economic slowdown and excess supply.
Brent crude looked set for a loss of around 36 per cent for the year as sustained selling pushed prices near 11-year lows, and the outlook for oil prices looks bleak for 2016. The Thomson Reuters CRB commodities index fell 24 per cent to six-year lows………………………………………..Full Article: Source

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