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Commodities Briefing - Archive | January, 2009

All that glisters is not gold

Posted on 29 January 2009 by VRS  |  Email |Print

From Hemscott.com: Gold enjoys a good financial crisis, on that analysts agree, but there is little consensus over the direction of future prices.

Last year, while most commodities prices were hurriedly undoing five-years of gains, gold closed the year up 4% at $869.75 per ounce—not an outstanding performance in its own right but against the backdrop of a global economic downturn the only metal to have gained over the year surely deserves a little applause. …. Full Article: Source

Gold resumes long-term uptrend

Posted on 29 January 2009 by VRS  |  Email |Print

From Forbes: The shiny metal has rallied 30% since November and could be setting up for another run at $1,000 and beyond. There have been many head-scratching moments in the investing world over the past year. Frustrated investors have been burned by everything from failing banks to record volatility.

Media headlines constantly present and reinforce a “sky-is-falling” scenario. But are things really that bad? …. Full Article: Source

Greenlight founder takes grandfather’s advice on gold

Posted on 29 January 2009 by VRS  |  Email |Print

From Bloomberg: Greenlight Capital Inc. founder David Einhorn is finally taking his grandfather’s advice. The $5.1 billion hedge fund is buying gold for the first time amid the threat of inflation from increased government spending.

Since Einhorn was 10 years old, his grandfather has warned him that investing in bullion and gold-mining stocks was the only “sensible” thing to do given the threat of inflation and the risks of so-called fiat currencies, New York-based Greenlight said in a Jan. 20 letter to clients. The firm had never before considered buying bullion or mining-company shares. …. Full Article: Source

Quartararo: The bottom has arrived in steel

Posted on 29 January 2009 by VRS  |  Email |Print

From Hardassetsinvestor.com: After doubling in price, steel has come down sharply – in fact retracing all of its gains over the past few years in very short order. Last time we met, prices were around $580 a metric tonne. In the peak, in the summertime, probably in July, the price of steel went to $1,200 a metric tonne for hot coil rolled steel.

Since that time, the prices have completely contracted, and now we’re back at levels below that $580 a tonne….. Full Article: Source

Rio mulls rights issue to pay down USD10bln debt

Posted on 29 January 2009 by VRS  |  Email |Print

From Independent.co.uk: Rio Tinto admitted for the first time yesterday that it could be forced to resort to a rights issue if it is to pay down $10bn (£7bn) of debt this year as planned.

After a spate of rumours about the London and Sydney-listed mining giant’s financial plans, the company was forced to issue a statement to the Australian Stock Exchange yesterday….. Full Article: Source

ICAP expands into base metals options

Posted on 29 January 2009 by VRS  |  Email |Print

From Commodities-now.com: ICAP plc, the world’s premier interdealer broker, has expanded its new base metals broking business with the recent hire of Keith Wildie and Gareth Hughes, spearheading ICAP’s expansion into base metal options.

ICAP hired Robert Rees and Steve Bingley to build and lead the firm’s London Metal Exchange (LME) base metals business in September 2008 and began broking in January 2009, with a Category Two membership of the LME. …. Full Article: Source

Short & leveraged investments

Posted on 29 January 2009 by VRS  |  Email |Print

From Morningstar.co.uk: Have you ever thought about going short, or even leveraging up your exposure to Live Cattle? No? Neither have we, but with the introduction of 33 short and 33 leveraged Exchange Traded Commodities (ETCs) you now have such an option.

The funds come courtesy of ETF Securities (ETFS), adding to their existing range of 51 ETCs….. Full Article: Source

Players flock to commodity ETF calls

Posted on 29 January 2009 by VRS  |  Email |Print

From Reuters: Volume in the PowerShares DB Commodity Index DBC.P ran 40 times the normal level with about 38,000 calls and 1,256 puts traded, according to Trade Alert. The exchange-traded fund tracks the price action of crude oil, heating oil, aluminum, gold, corn and wheat and was up 2.18 percent to $20.58 in afternoon trade.

In the March $21 call strike, 34,180 contracts traded vs 4 contracts of existing open positions. …. Full Article: Source

ETFs emerge as alternative amid ongoing bear market

Posted on 29 January 2009 by VRS  |  Email |Print

From Joongangdaily.joins.com: Hong Min-ki, 36, lost 30 million won ($21,786) in the stock market last year. The stocks he handpicked all plunged. The mutual funds in his portfolio also ended up betraying his trust.

“The situation is that I need to do something to regain some of the losses, but now I am afraid that I’ve lost a sense of which stocks or funds I should pick,” Hong said….. Full Article: Source

Investors pump cash into ETFs

Posted on 29 January 2009 by VRS  |  Email |Print

From Investordaily.com: Exchange traded fund (ETF) inflows accelerated in 2008 as their appeal of increased diversification, liquidity and lower fees attracted investors from traditional managed funds.

American investors pumped nearly $200 billion into ETFs in the first 11 months of 2008 and pulled $193 billion out of managed equity managed funds, according to the Investment Company Institute of Washington….. Full Article: Source

Rubber futures rise to six-day high on U.S. stimulus measures

Posted on 29 January 2009 by VRS  |  Email |Print

From Bloomberg: Natural rubber futures advanced to a six-day high in Tokyo, on optimism that U.S. stimulus measures will help ease the global economic recession and boost demand for the raw material used to make car tires.

The commodity rebounded from yesterday’s 1.6 percent slide, gaining as much as 2.7 percent to the highest price since Jan. 21. The gain followed equity market surges in Asia and U.S. …. Full Article: Source

Nickel up as base metals are mixed

Posted on 29 January 2009 by VRS  |  Email |Print

From Metalmarkets.org.uk: The price of three-month nickel was up $300 to $11,700 per tonne in late afternoon trade in London Wednesday on the possibility that production cuts will tighten supplies.

Copper prices were also higher as March copper added 1 cent to $1.50 per pound in New York and three-month copper gained $60 to $3,370 per tonne on the London Metal Exchange….. Full Article: Source

Most markets settle higher though off peaks

Posted on 29 January 2009 by VRS  |  Email |Print

From Guardian: Commodity prices were mostly up on Wednesday as weary investors let down their guard a bit and assumed a bit more risk which allowed energy, grains and metals contracts to recover from the previous session’s sell-off.

Gold was the odd one out with the benchmark futures contract ending New York trade 1 percent down — as it did on Tuesday — to stay below the $900 per ounce level critical to bullish confidence. …. Full Article: Source

Oil falls towards $42 as demand jitters weigh

Posted on 29 January 2009 by VRS  |  Email |Print

From Guardian: Oil edged down towards $42 a barrel on Thursday, as fears over faltering demand in the global economy outweighed U.S. data showing lower gasoline and distillate stocks in the world’s top energy consumer.

Traders will watch for U.S. weekly jobless claims and December durable goods orders later on Thursday, as well as advance fourth-quarter gross domestic product data on Friday, for further clues on the health of the U.S. economy….. Full Article: Source

OPEC calls for curbing speculators, blames hedge funds for rout

Posted on 28 January 2009 by VRS  |  Email |Print

From Bloomberg: OPEC wants U.S. regulators to curtail oil trading by hedge funds and speculators who helped make last year the most volatile in crude oil trading.

Abdalla el-Badri, secretary-general of the Organization of Petroleum Exporting Countries, is seeking rules to “limit the level of speculation” by investors who buy oil without planning to use it. Oil surged 46 percent in the first half of 2008 to a record $147.27 only to plunge by the end of the year, prompting OPEC to make its biggest ever supply cuts. …. Full Article: Source

Commods swing wildy on inflation/deflation debate

Posted on 28 January 2009 by VRS  |  Email |Print

From Guardian: Commodities investors are not sure whether to worry more about inflation or deflation, meaning the wild ride in oil, metals and grains prices is far from over.

Economic misery and unemployment have hammered prices for raw materials, sparking fears of deflation. But a new U.S. administration vowing to jump-start America’s stalled economy has fueled worries about inflation down the road….. Full Article: Source

Commodities plunge as recession curbs demand for raw materials

Posted on 28 January 2009 by VRS  |  Email |Print

From Bloomberg: Commodity prices tumbled the most in two weeks as the global recession eroded demand for energy, metals and grains. The Reuters/Jeffries CRB Index of 19 raw materials fell 3.7 percent, the most since Jan. 12.

Crude oil plummeted more than 9 percent, copper plunged the most in seven weeks, and corn declined 4.1 percent. Only cocoa and silver posted gains. …. Full Article: Source

Hint of growth in demand for raw materials

Posted on 28 January 2009 by VRS  |  Email |Print

From FT: The cost of shipping dry bulk commodities such as iron ore, coal and grains yesterday rose to its highest level in three months, recovering 51 per cent from its December low, on signs of a tentative renewal in demand for raw materials.

The Baltic Dry Index, the market benchmark often seen as a leading indicator of commodities demand and global economic activity, climbed above 1,000 points for the first time since October, reaching 1,004 points in its sixth consecutive session of gains….. Full Article: Source

Relax: There will be no depression - gold and silver will outperform

Posted on 28 January 2009 by VRS  |  Email |Print

From Mineweb.com: LA-based gold commentator Kenneth J. Gerbino tells us why he feels there won’t be a depression but we will be faced with inflation, and markets in general, and bonds in particular, will prove to be bad buys, while gold and silver will perform best of all.

The financial pyramid was brought on by easy money. We are now faced with global investment losses and economic numbers that are at dangerous levels, and foretell a drastic future. …. Full Article: Source

Energy spreads offer leveraged profits, reduced risk

Posted on 28 January 2009 by VRS  |  Email |Print

From Hardassetsinvestor.com: The inherent volatility of the energy markets can make them very dangerous places for retail investors to trade, especially in transitional periods. The roiling crude and distillate marketplace can bounce thinly capitalized traders out rather rudely and rather quickly.

Spread trades can stretch an investor’s capital and minimize risk….. Full Article: Source

Why investors are rushing to Commodities

Posted on 28 January 2009 by VRS  |  Email |Print

From Commodityonline.com: 2008 was a memorable year for commodities globally and commodity futures in particular in India. A quick review of the year gone by shows that the demand slowdown is firmly in place and the prices of key commodities are significantly down compared to a year ago.

Several commodities including crude oil, gold, aluminum, copper, soyabean, pepper and a host of others touched their all-time highs only to slide swiftly to then unimaginably low levels….. Full Article: Source

Nations pledge Euro 5.5bln to alleviate hunger

Posted on 28 January 2009 by VRS  |  Email |Print

From FT: More than a dozen countries on Tuesday committed €5.5bn over the next five years as part of a fresh initiative to alleviate global hunger and help impoverished farmers boost production of agricultural commodities.

The commitments came after a United Nations conference on food security in Madrid, at which senior UN officials warned that the current combination of the financial crisis and high food prices would increase malnutrition levels. …. Full Article: Source

Britain demands global response as world’s hungry to hit 1 bln

Posted on 28 January 2009 by VRS  |  Email |Print

From Xinhua: World leaders, major businesses and the United Nations were urged to sign-up to a new international agreement on Tuesday that will lift millions of people out of hunger and better prepare the world for future food crises.

Speaking at a world summit in Madrid, Spain, which ended on Tuesday, British International Development Minister Ivan Lewis setout a proposed pact that will for the first time establish a global response to food shortages that will double both food production in Africa and the growth of the agriculture sector in Asia. …. Full Article: Source

Investing in agricultural commodities

Posted on 28 January 2009 by VRS  |  Email |Print

From Istockanalyst.com: Investing icon Jim Rogers and Australia’s Macquarie Funds Group have teamed up to create an agricultural-commodities index that will help investors profit from shifting patterns of food consumption in the burgeoning market of Mainland China.

The Macquarie and Rogers China Agriculture Index is an investable index that will track price changes of the market “basket” of the agricultural commodities most commonly consumed in China. Macquarie Funds is the asset management arm of Australia’s Macquarie Group….. Full Article: Source

New index combines Jim Rogers’ top two profit plays: Commodities and China

Posted on 28 January 2009 by VRS  |  Email |Print

From Moneymorning.com: Investing icon Jim Rogers and Australia’s Macquarie Funds Group have teamed up to create an agricultural-commodities index that will help investors profit from shifting patterns of food consumption in the burgeoning market of Mainland China.

The Macquarie and Rogers China Agriculture Index is an investable index that will track price changes of the market “basket” of the agricultural commodities most commonly consumed in China. Macquarie Funds is the asset management arm of Australia’s Macquarie Group….. Full Article: Source

Commodity assets under management fell to $154 bln in ‘08

Posted on 28 January 2009 by VRS  |  Email |Print

From Cattlenetwork.com: Assets under management in commodities last year fell 43% from a record $270 billion at the end of the second quarter to US$154 billion, with the massive downturn in prices accounting for most of this drop, Barclays Capital said in a note dated Monday.

For the year as a whole, commodity assets under management were down 22% on year, the bank said, again pointing out that this wasn’t due to widespread investment outflows, but price falls. …. Full Article: Source

US windpower soared in ‘08 but slowed late in year

Posted on 28 January 2009 by VRS  |  Email |Print

From Guardian: U.S. wind power capacity grew last year by its fastest rate yet, but development “slowed to a trickle” late in 2008 as the credit crunch hit renewable energy, an industry group said.

“Our numbers are both exciting and sobering,” said Denise Bode, chief executive of the American Wind Energy Association….. Full Article: Source

Companies clean up - in the wrong way

Posted on 28 January 2009 by VRS  |  Email |Print

From Guardian: Emissions trading, sometimes called cap and trade, tackles climate change by providing economic incentives to achieve reductions in carbon and other greenhouse gases.

The emissions trading scheme (ETS) is the world’s most advanced example of a market-based scheme under which a cap has been set on the amount of greenhouse gases which may be emitted….. Full Article: Source

EU carbon trading up 83%, analyst says

Posted on 28 January 2009 by VRS  |  Email |Print

From Eponline.com: The global carbon market in 2008 grew faster both in terms of volume and value than estimated, dramatically bucking the current downturn that has depressed most global commodity trading, according to a report by Point Carbon, a provider of market intelligence and analysis.

Overall, 2008 saw 4.9 billion tonnes (gigatonnes or Gt) of carbon dioxide equivalent (CO2e) change hands, up 83 percent on 2007, a recent “Carbon Market Monitor” report says….. Full Article: Source

Cash and tax breaks for the carbon agenda

Posted on 28 January 2009 by VRS  |  Email |Print

From Theglobeandmail.com: Canadian energy companies will get both direct assistance and tax breaks to develop carbon-capture-and-storage technology that promises to reduce greenhouse gas emissions from coal-fired power plants and oil sands projects.

In his budget Tuesday, Federal Finance Minister Jim Flaherty unveiled a $1-billion “green energy fund” that will support research and commercialization of clean-energy projects, including carbon capture and storage (CCS)….. Full Article: Source

Obama’s new emissions standards good energy and defense policy, little climate impact

Posted on 28 January 2009 by VRS  |  Email |Print

From Examiner.com: Actions taken this week by President Obama on new fuel efficiency standards is good energy (and defense) policy, but has little to do with global warming.

President Obama Obama directed his Environmental Protection Agency to review a California application to regulate greenhouse gases and told his Department of Transportation to begin implementing fuel efficiency standards passed last year but not implemented by the Bush administration….. Full Article: Source

Steel makers forecast grim first quarter

Posted on 28 January 2009 by VRS  |  Email |Print

From AP: Two steel makers forecast a grim first quarter Tuesday as the recession continues to slow demand for everything from washing machines to sport utility vehicles, suggesting that more plant shutdowns and job cuts could be on the way.

U.S. Steel and AK Steel said they expect operating losses in the first three months of 2009, while a third steel company, Nucor Corp., forecast “only marginally better” earnings compared with its fourth quarter. …. Full Article: Source

Copper leads base metals lower on recession, demand fears

Posted on 28 January 2009 by VRS  |  Email |Print

From Theaustralian.news.com.au: Copper led a decline across the base metals complex overnight as investors returned their focus to recession and slumping demand.

Copper, a key material in construction, had climbed around 10 per cent on Monday after data showed sales of previously owned US homes rebounded in December….. Full Article: Source

Gold’s finest hour is coming

Posted on 28 January 2009 by VRS  |  Email |Print

From Sovereignsociety.com: Over the last 12 months the world has witnessed the greatest market volatility since the 1930s. Banks in several industrialized countries, including the United States, are effectively bust, credit markets have frozen, unemployment has soared and real estate remains in a freefall.

Domestic consumption in the United States – vital to global export growth – has collapsed amid a consumer recession while individual balance sheets have been crushed by a deflation gripping real estate, stocks, non-Treasury debt, commodities, foreign currencies (except the yen) and even fine art. …. Full Article: Source

Silver stock joins big gold companies raising capital despite tough market

Posted on 28 January 2009 by VRS  |  Email |Print

From Mineweb.com: Silver Wheaton, seen by a number of investors as the “No 1 silver proxy”, has announced a CAD 250m bought deal, at CAD 8 a share, joining a growing number of listed gold stocks successfully raising fresh capital, among them Alamos Gold, which has just announced a CAD 75m bought deal at CAD 8 a share.

The deals highlight the ranking of gold stocks as the world’s best-performing equities subsector; silver stocks rank in second place. …. Full Article: Source

Sterling rallies against major world currencies

Posted on 28 January 2009 by VRS  |  Email |Print

From Financialadvice.co.uk: The UK currency was today centre stage on the currency exchange markets after a sharp rebound across the board.

While there are suggestions that the Barclays bank statement, indicating that maybe the banking sector is on the turn, has breathed new life into the UK currency many traders believe the news from the high street was far more telling….. Full Article: Source

Australian, New Zealand dollars slip on rate cut expectations

Posted on 28 January 2009 by VRS  |  Email |Print

From Bloomberg: The Australian and New Zealand dollars declined as commodities fell the most in two weeks and consumer prices in Australia posted the biggest drop in 11 years, clearing the way for further interest-rate cuts.

The currencies slid as Australia’s consumer price index fell 0.3 percent from the third quarter, when it gained 1.2 percent, the Bureau of Statistics said in Sydney today. The UBS Bloomberg Constant Maturity Commodity index of 26 products declined 3.5 percent. …. Full Article: Source

Investec extends currency fund range

Posted on 28 January 2009 by VRS  |  Email |Print

From FT Adviser.com: The Luxembourg-based Investec GSF Managed Currency Fund (Sterling) has been renamed as the Investec GSF Currency Alpha Fund, with new US dollar and euro share classes added to sit alongside the existing sterling share class.

The fund is an absolute return, cash-plus product, and the fund managers have an internal target whereby they seek to provide a 2-3 per cent pa gross return over the relevant Libor benchmark. …. Full Article: Source

Yen trades near 1-week low on prospect U.S. to make ‘bad bank’

Posted on 28 January 2009 by VRS  |  Email |Print

From Bloomberg: The yen traded near a one-week low against the dollar and the euro on speculation the U.S. will create an institution to remove toxic assets from banks’ balance sheets, reviving demand for higher-yielding assets.

The yen also fell versus Norway’s krone and Sweden’s krona. The Federal Deposit Insurance Corp. may manage the so-called bad bank that the Obama administration is likely to set up as it tries to break the back of the credit crisis, two people familiar with the matter said yesterday. …. Full Article: Source

Australian dollar eases on inflation data

Posted on 28 January 2009 by VRS  |  Email |Print

From Theage.com.au: The Australian dollar was lower around noon as an easing in the inflation rate put some pressure on the currency. The dollar was trading at $US0.6631, down from Tuesday’s close of $US0.6654.

During the morning, the currency moved between $US0.6613 and $US0.6670….. Full Article: Source

Loonie’s worst year may run into 2009

Posted on 28 January 2009 by VRS  |  Email |Print

From Calgaryherald.com: Canada’s currency may extend its biggest annual decline on record, as tumbling crude prices hobble foreign investment in the country’s oil patch, according to the world’s biggest strategists and economists.

The Canadian dollar fell 18% this year as a global recession cut demand for commodities, which generate half the country’s exports. Canada’s current-account surplus, the broadest measure of trade, will turn into deficit in 2009, said Toronto-based Scotia Capital Inc., a unit of Canada’s third-biggest bank….. Full Article: Source

Philip Bowring: The global imbalance

Posted on 28 January 2009 by VRS  |  Email |Print

From IHT: The new U.S. secretary of the Treasury, Timothy Geithner, has sparked a potentially acrimonious debate by alleging at his confirmation hearings that China manipulates its currency. This may be politically necessary but it’s not helpful.

The currency debate has become sterile, obscuring a bigger and, for the global economy, more difficult issue: China’s huge current account surplus, which is no longer just a mirror of U.S. deficits….. Full Article: Source

Hot agriculture ETFs post record inflows

Posted on 28 January 2009 by VRS  |  Email |Print

From Commodityonline.com: Exchange Traded Funds managed by ETF Securities Ltd are showing considerable inflows last week with agriculture inflows up $56 mn, the largest weekly inflow since April 2008, ETF Securities Ltd said.

Steady inflows into ETCs have been recorded every week for the past eleven weeks, going back to 7th November 2008. Of those past 11 weeks, $1,570m (£1,150m) has flowed into ETCs with gold and oil contributing 90%….. Full Article: Source

Would you own an ETN?

Posted on 28 January 2009 by VRS  |  Email |Print

From Indexuniverse.com: The risk in holding an ETN, of course, is that some weekend we will wake up to learn that the underwriting bank has been nationalized and its senior debt holders wiped out. This seems extraordinarily unlikely for a bank as large as Barclays—especially for one that is profitable right now—but it is a question in this extraordinary environment.

Currently, a small minority of note holders are voting with their feet….. Full Article: Source

Power trading can be controlled by two regulators: FMC

Posted on 28 January 2009 by VRS  |  Email |Print

From Indiatimes.com: Ahead of the hearing of PXIL’s petition on electricity futures, the commodity market regulator, FMC, has said that the spot and
futures trading of electricity can be controlled by two different regulators.

“The spot market and forward markets in goods (including electricity) can be regulated by two different regulators,” Forward Markets Commission (FMC) Chairman B C Khatua said in a letter to the Central Electricity Regulatory Commission (CERC). …. Full Article: Source

CME Group and Johannesburg Stock Exchange to cooperate on corn futures contract

Posted on 28 January 2009 by VRS  |  Email |Print

CME Group has signed an agreement with the JSE Ltd to license CME Group’s benchmark corn futures settlement prices to create a new JSE cash-settled corn futures contract.

The contracts will be listed, traded and settled by the JSE’s Safex Agricultural Products Division alongside the current successful South African grain contracts. The 100 metric ton corn contract will see the May 09, July 09 and September 09 expiries introduced for trading on Wednesday 28 January 2009….. Full Press Release: Source

Reliance Money to form JV with CWT Commodities

Posted on 28 January 2009 by VRS  |  Email |Print

From : RTTNews: Reliance Money, a part of the Reliance ADA Group and a large shareholder in National Multi Commodity Exchange, is likely to widen its services by setting up a joint venture with CWT Commodities, a Singapore -based warehousing company to manage goods stored in warehouses.

The 50:50 new Indian JV firm, Reliance CWT Commodities would issue warehouse receipts that guarantee the quality and quantity of goods stored in its godowns apart from grading and sorting services….. Full Article: Source

Commodities: How do you know if the trend is “for real”?

Posted on 28 January 2009 by VRS  |  Email |Print

From Elliottwave.com: First of all, it’s crucial to remember that a market forecasting method that can tell you with 100% certainty what “the real” trend is simply doesn’t exist. It’s a truism, but new traders often forget that.

Having said, Elliott wave analysis can be very helpful when you’re struggling with this question….. Full Article: Source

Corn, soybeans fall as slumping global economy cuts demand

Posted on 28 January 2009 by VRS  |  Email |Print

From Bloomberg: Corn and soybeans fell the most in two weeks as the slowing global economy erodes demand for U.S. crops used to make food, animal feed and biofuels.

U.S. consumer confidence sank to the lowest level on record in January as jobs evaporated and home values sank, signaling a further slide in spending, according to a report from the Conference Board. …. Full Article: Source

Oil bounces above $42 after plunge on demand fears

Posted on 28 January 2009 by VRS  |  Email |Print

From Reuters: Oil rebounded above $42 a barrel on Wednesday from a 9-percent fall a day ago, as worries over demand due to the faltering global economy eased.

Traders will watch for weekly U.S. inventory data from the Energy Information Administration (EIA) due later in the day, after the American Petroleum Institute (API) reported a much smaller than expected crude stockbuild on Tuesday….. Full Article: Source

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