Fri, Apr 29, 2016
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Commodities Briefing 29.Apr 2016

Posted on 29 April 2016 by VRS |  Email |Print

The speculators that traded $261 billion in Chinese commodities in a single day last week are retreating as regulators prepare to step up control of the market.
The value of futures traded across China’s three biggest commodity exchanges has shrunk 42 percent since investors spent 1.7 trillion yuan last Thursday on everything from steel bars to eggs. The amount that changed hands was on a par with the entire U.S. equities market on the same day………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

China’s securities regulator ordered the country’s major commodity futures exchanges this week to control speculative trading activity, sources told Reuters, after a surge in prices sparked fears of a boom-and-bust cycle.
In response, commodity futures exchanges in Dalian, Shanghai and Zhengzhou ordered major institutional investors that lack a commodities background to rein in their trading, three people with direct knowledge of the situation said. The sources didn’t define what was meant by a lack of background in commodities………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

Papua New Guinea lays out the challenges in stark and basic terms following slump in prices. If you want evidence of the “commodities curse”, look no further than Port Moresby, the raggle-taggle capital of Papua New Guinea.
Of course, the curse is not Papua New Guinea’s problem alone – the global collapse in prices of so many key commodities is creating wrenching challenges in economies ranging from Venezuela, Peru and Brazil to Mozambique, Indonesia and Russia – but Papua New Guinea lays out the challenges in stark and basic terms………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

Crude oil prices continued to trend higher for the second consecutive fortnight in a row, as Brent rose more than 7.5 per cent while WTI gained 10.10 per cent over the same period.
On MCX, oil prices have risen by around 11.85 per cent in the same time frame. The rally in oil prices is triggered by a combination of factors such as increased optimism that prices may have bottomed out and also increased speculative behaviour by fund managers………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

The global oil market will face a lack of supply in three years’ time due to expenditure cuts and postponements in mega projects, Patrick Pouyanne, chairman of the Board and CEO of French oil giant Total said.
Speaking at 2016 Columbia Global Energy Summit, Pouyanne talked about the difficulties that oil companies are facing under low oil prices. “Fifteen days after I became the CEO of Total, oil prices collapsed … and we lost $10 billion in cash flows in two months,” he said. “Due to the huge drop in oil prices, most of the players had to squeeze their cash flows and investments,” he added………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

Crude prices increase as many traders become more confident that oversupply will wane. Oil’s rally chugged ahead on Thursday, with the U.S. benchmark closing above $46 a barrel for the first time since November, again thwarting analysts who have repeatedly called for a retreat.
Global supply remains strong and U.S. stockpiles are increasing, but many traders are convinced the oversupplied market is on its way to balancing, brokers said. Their hopes are buoyed by steadily declining U.S. production and intermittent supply disruptions around the globe. And they got an extra boost Thursday from currency markets that lifted several commodity prices………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

Brent prices for 2017 ended trading above $50 per barrel on Wednesday for the first time since mid-December following the largest and most sustained rally in prices since the oil slump started.
The average for the 12 futures contracts expiring in 2017, called the calendar strip, has risen by 34 percent from its recent low of $37.45 on Jan. 20 to $50.26 on April 27.Spot prices, represented by the nearest futures contract, dominate the headlines and are of most interest to analysts and financial investors………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

Sunday, April 17, was the designated moment. The world’s leading oil producers were expected to bring fresh discipline to the chaotic petroleum market and spark a return to high prices.
Meeting in Doha, the glittering capital of petroleum-rich Qatar, the oil ministers of the Organization of the Petroleum Exporting Countries (OPEC), along with such key non-OPEC producers as Russia and Mexico, were scheduled to ratify a draft agreement obliging them to freeze their oil output at current levels………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

Questions remain about current high oil stockpiles and the potential for increased supply. Even as oil rallies, analysts have barely nudged up their price forecasts as they worry that crude’s recent gains might not be sustainable.
The price of oil has jumped 76% from the decade-low it hit earlier this year. That is mainly on hopes that dwindling U.S. oil production will help take crude out of an oversupplied market………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

After three straight years of losses, analysts are finally prepared to say gold prices have found a bottom, with rising prices seen this year and next as concerns over the pace of U.S. monetary policy tightening fade.
Gold analysts polled by Reuters have hiked their forecasts for the precious metal by nearly $100 an ounce since the start of the year after it posted its biggest quarterly rise in nearly 30 years in the three months to March………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

The Commitments of Traders Report is one of the most important publications on the gold market. It is usually published every Friday at 15:30 Eastern time by the Commodity Futures Trading Commission (CFTC) to provide market participants “a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC.”
Unfortunately the readers don’t get a full picture because of a three day lag between a report and the actual positioning of traders (though the report is issued on Friday, it contains Tuesday’s data). The open interest, analyzed in the report, is the total number of futures contracts not yet liquidated by an offsetting transaction or fulfilled by delivery………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

It was no fun investing in precious metals for most of 2011-2015, but the past few months have sure been a blast for buy-and-hold investors. Silver prices are up 22.5% year to date, and gold isn’t far behind. Now that there are some profits available to take, some gold and silver investors wonder if they should grab them. The answer for most people is not yet — not even close.
Yes, there are gains. But the real question for gold and silver investors isn’t whether or not there are profits, it’s whether there are better options for their investment dollars. What other assets have a better risk/reward profile? Cash? Stocks? Bonds? No thank you!……………………………………….Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

The Economist’s metals index has fallen by 46% from its peak in 2011, largely because of slowing demand in China. Supply disruptions caused occasional spikes: nickel prices rose in the first half of 2014 after Indonesia banned metal-ore exports and zinc prices jumped in 2015 after mine closures.
Metals prices have rallied in the past few months, however, thanks to a weaker dollar and a credit surge in China. The price of iron ore, a steel-making ingredient, has jumped by 70% since December. The value of tin has increased because Indonesia, the world’s second-biggest producer, introduced regulations to halt illegal trade that also curbed exports; recent flooding has also restricted access to mining areas………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

Iron ore’s surprise rally may be a thing of the past in just three months. Rising supply will top demand once more and the sudden jump in speculative trading in China that’s helped support gains is set to fizzle out, according to Brazil’s Itau Unibanco Holding SA.
The commodity will probably soon be back below $50 a metric ton, and may end the year at about $42, Artur Manoel Passos, an economist in Sao Paulo at Latin America’s largest bank by market value, said in an interview. Last week, iron ore traded as high as $70.46………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

Everyone’s talking about Chinese speculators. This year has seen an unprecedented surge of trading volumes and open interest in Chinese markets as institutional and retail investors pour money into commodities.
Both the Shanghai Futures Exchange (ShFE) and the Dalian Exchange are upping margin requirements and transaction fees to try and calm overheating contracts such as steel rebar and iron ore. The stampede appears to have been halted with both prices and trading activity losing some of their recent froth. But the current trading frenzy shouldn’t distract from the growing global influence of China’s domestic commodity exchanges………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

ETF growth across the industry in Q1 was fueled by the retail space, climbing to $2.3 trillion overall. More specifically, during Q1 2016, ETF assets climbed by 2.4% QoQ to $2.3 trillion, which was fueled in part by retail channels, as calculated by its Fund Distribution Intelligence.
However, this performance was mitigated by an overall net decline of new assets (-0.68%), which corresponded to a decrease of $15.0 billion. In terms of the retail space, ETFs in this realm also saw increases in assets, namely across fixed income, alternative and commodity products, though equity, convertibles and allocation product assets were all down QoQ………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

With the droughts on the West Coast, and led crisis expanding from Flint to the rest of the East Coast, investing in water companies sounds like a no brainer. To further back the opportunity, the genius from the movie “The Big Short” also has explained why water is the commodity to buy.
Especially if you have passed your Financial Assessment test and are eligible to expand your investing portfolio. With that I finally sat down and wrote about the best water ETFs to invest in 2016, which we have been advising to some Invest Diva students. You don’t have to search no more!……………………………………….Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

The commodities market has a very positive sentiment now and the commodity hedge funds are doing better than other hedge funds. Commodities hedge funds have given negative returns for the past three years.
But according to Peter Laurelli, vice-president, research, eVestment, the current year has started on a positve note for commodities as investors start reallocating for better gains. The commodities market has a very positive sentiment now and the commodity hedge funds are doing better than other hedge funds………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

The world’s biggest financial market may be destined for a flash-crash future.This sounds scary because the foreign-exchange market is crucial, determining the real-time worth of every nation’s currency. But violent moves there may not matter as much as they do in other markets, such as those for equities.
Rachel Evans of Bloomberg News wrote an article on Thursday highlighting how the $5 trillion-a-day currency market is undergoing a significant transformation. Trading has been slowing, perhaps because of a lack of investor conviction in the face of central bank intervention………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

Yen’s surge contributes to tremors across asset classes from commodities to S&P futures. This week provided further evidence of how sharp currency moves can have an impact on the broader market.
The Japanese yen’s surge early on Thursday whacked the exporter-sensitive Nikkei 225. Because the USD/JPY is seen by many a proxy of global risk appetite, the exchange rate’s plunge contributed to tremors across asset classes from commodities to S&P futures………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

Disagreement came to the global financial system when the control over reserve currency became a matter of privilege rather than responsibility. That struggle has since become a morass of monetary expansion and conflict as states have pursued their own, often incompatible currency goals.
The battle of the currencies has left widespread financial instability in its wake, weakening the state-centric currency model that ruled the monetary order for the past century. Now, a different type of money — digital currency — is making a play to become the new standard. If successful, the politics of money could radically change, and with it, the power of states themselves………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

European Court of Justice rules EU gave out too may allowances when it expanded the emissions program in 2013. The European Union’s highest court on Thursday ordered the European Commission to adjust its emissions-trading program in a way that could raise costs for some of the bloc’s biggest companies.
The European Court of Justice ruling reinforced the EU’s efforts to more aggressively cap carbon-dioxide emissions in the years to come, following a landmark agreement in Paris last year among world leaders to address climate change………………………………………..Full Article: Source

Posted on 29 April 2016 by VRS |  Email |Print

Rather than a patchwork of provincial policies, a Canada-wide system would send a stronger signal that a low-carbon future is upon us. Over the last decade, in the absence of federal leadership, Canadian provinces have gone their own way on carbon pricing.
Alberta chose a unique carbon pricing system, British Columbia implemented a carbon tax, and Quebec launched a cap-and-trade system which Ontario will soon join. Others are waiting in the wings, either weighing their options or vehemently opposed. As a result, Canada’s environmental standing fell and full economic potential went untapped………………………………………..Full Article: Source

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