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Commodities Briefing - Archive | March, 2009

Carbon trading: “Boom and bust won’t work”

Posted on 30 March 2009 by VRS  |  Email |Print

From Climatechangecorp.com: Boom and bust cycles - the signature of the financial markets - threaten to destabilse the carbon price say FOE.

Friends of the Earth have put together a new report on the carbon market, criticising it for its lack of long-termism…..Full Article: Source

Environmental resources exchange opens in central China

Posted on 30 March 2009 by VRS  |  Email |Print

From Xinhua: China’s first environmental resources exchange opened Friday in Wuhan, capital of central China’s Hubei Province.

It is the country’s first business to facilitate transactions of companies’ pollutant quota. For example, a company has limits to how much it can pollute. If it does not reach that limit, it can now sell it’s excess allowance to smaller companies…..Full Article: Source

Call for global currency wins int’l backing

Posted on 30 March 2009 by VRS  |  Email |Print

From Chinadaily.com: Central bank governor Zhou Xiaochuan’s recent call to replace the US dollar with a new global currency is gaining traction within the international community.

Joseph Stiglitz, a Columbia University economics professor who heads a United Nations expert panel, said a reserve currency system based on an International Monetary Fund (IMF) unit instead of the US dollar, like what Zhou has proposed, could be phased in within a year…..Full Article: Source

China’s united currency idea divides nations

Posted on 30 March 2009 by VRS  |  Email |Print

From Cbc.ca: China wants to create a new currency for international finance reserves to help deal with the global credit crunch.

Now, some economics watchers see that notion as self-serving, others as timely. But whatever the majority opinion of China’s grand idea, the single currency theory certainly isn’t new…..Full Article: Source

Global fund design with ETFs

Posted on 30 March 2009 by VRS  |  Email |Print

From Forbes: Investment funds are a bit like suits. Some fit just fine off the rack, others need a few alterations. Unfortunately, you can’t call your mutual fund manager and ask him to make a few changes to the fund’s portfolio to suit your tastes.

But you can do the next best thing: use exchange-traded funds as building blocks to create a customized portfolio of your own design. International ETFs are especially interesting in this respect. It wasn’t long ago that countries like Turkey, Chile or Malaysia were essentially off limits to small investors…..Full Article: Source

ETF Securities sees assets under management rise to USD10.3bn

Posted on 30 March 2009 by VRS  |  Email |Print

From Etfexpress.com: Exchange-traded commodities experienced a large rise in inflows last week, with total inflows up USD168m and assets under management up USD690m, according to ETF Securities.

Net inflows have risen by USD3.3bn since mid-November, more than compensating for USD1.8bn of outflows during the financial market meltdown in the second half of last year…..Full Article: Source

NYMEX natgas funds add to net short futures - CFTC

Posted on 30 March 2009 by VRS  |  Email |Print

From Reuters: Noncommercial or speculative investment funds on the New York Mercantile Exchange increased their net short natural gas futures exposure by more than 5,800 contracts for the week ended March 24, the Commodity Futures Trading Commission said on Friday.

The report showed funds holding 121,018 net short futures, up 5,831 contracts from the previous week’s total of 115,187…..Full Article: Source

Lyxor launches gold ETN

Posted on 30 March 2009 by VRS  |  Email |Print

From Structuredproductsonline.com: Lyxor Asset Management, a wholly owned subsidiary of Société Générale (SG) has launched its first exchange-traded note (ETN), the Lyxor ETN Long Gold, which is listed on the London Stock Exchange (LSE). The note is designed to track, in real time, the performance of the gold spot price quoted in US dollars per troy ounce.

Lyxor ETNs are secured notes guaranteed by SG and 100% collateralised with Standard & Poor’s AAAf-rated euro government bond funds or government bonds from the Euro zone…..Full Article: Source

MMTC expects commodity bourse June, forex bourse July

Posted on 30 March 2009 by VRS  |  Email |Print

From WSJ: India’s fourth national commodities exchange and a new currency exchange are likely to start operations in June and July respectively, MMTC Ltd., a partner in both the ventures, said Friday.

The state-run trading house is partnering Indiabulls Financial Services in the commodities exchange…..Full Article: Source

Phoenix Partners introduces electronic trading platform for RECs

Posted on 30 March 2009 by VRS  |  Email |Print

From Nawindpower.com: Phoenix Partners Group, an interdealer credit and equity derivatives broker, has introduced an electronic trading platform for renewable energy certificates (RECs).

The Web-based platform provides a real-time forum for buyers and sellers of RECs to review available inventory and place bids or offers for all tradeable REC programs from a single online screen…..Full Article: Source

Nigeria: ‘Locals not interested on commodity exchange’

Posted on 30 March 2009 by VRS  |  Email |Print

From Allafrica.com: The exchange was established in 2001. It is a conversion of the Abuja Stock Exchange to commodity exchange. We were able to put together the spot market which started operation on the 25th of July 2006. We are trading in six commodities and the trading was running at both Abuja and Kano.

The problem we are faced with since we started has to do with market liquidity. The market has been illiquid. What I mean here is that the transaction that goes through the floor of the exchange is very few. And we need to do a lot to improve on the volume of transaction…..Full Article: Source

CME Group announces the launch of new E-mini Gold and Silver futures contracts

Posted on 30 March 2009 by VRS  |  Email |Print

CME Group Inc., the world’s largest and most diverse derivatives exchange, today announced the E-miniR gold kilo and E-mini silver 1,000 ounce futures contracts, scheduled to begin trading on April 19 for trade date April 20. These contracts are listed with, and subject to, the rules and regulations of NYMEX. The products will be available only on the CME GlobexR electronic trading platform.

“As CME Group continues to globalize its innovative product mix, the new E-mini gold and silver contracts will now allow a broader customer base, including institutional trading firms based in Asia, to hedge its risk in the precious metals markets,” said Joe Raia, CME Group Managing Director of Energy and Metals Products and Services. “In addition, our customers continue to seek the security of CME Clearing and the capital efficiencies of cross-margining against our benchmark gold and silver futures contracts to manage their risk in these volatile economic times.”….Full Press Release: Source

Kingsman forecasts global sugar deficit next year

Posted on 30 March 2009 by VRS  |  Email |Print

From Bloomberg: Global sugar consumption may exceed production by 2.5 million metric tons in the year that starts April 1, researcher Kingsman SA forecast today.

Worldwide use will reach 166.21 million metric tons as production rises to 163.71 million tons, Kingsman said today in a report. The Lausanne, Switzerland-based company’s forecast was the first for the 2009-2010 marketing year that begins next week…..Full Article: Source

UK economy shrinks at faster pace

Posted on 30 March 2009 by VRS  |  Email |Print

From BBC: The UK economy shrank even more than expected in the last three months of 2008, revised official figures show. The Office for National Statistics (ONS) said the economy shrank by 1.6% compared to the third quarter.

That was the biggest fall in GDP (gross domestic product) since 1980 and more than an earlier 1.5% estimate…..Full Article: Source

Strong commodities and solid results bring respite

Posted on 27 March 2009 by VRS  |  Email |Print

From FT: US stocks rallied strongly yesterday to put the benchmark S&P 500 index on course for its biggest monthly gain since 1974. Strength in the cash-rich technology sector, meanwhile, meant the Nasdaq Composite index is now in positive territory for the year.

The S&P 500 rose 2.3 per cent to 832.86 and the Dow Jones Industrial Average gained 2.3 per cent to 7,924.56. The Nasdaq Composite index surged 3.8 per cent to 1,587, putting it 0.6 per cent up for 2009…..Full Article: Source

Gold, other commodities up on renewed buying power

Posted on 27 March 2009 by VRS  |  Email |Print

From IHT: Gold prices rose slightly Thursday, buoyed by renewed buying power on Wall Street that has taken stocks, bonds and commodities higher.

Gold prices have wavered in recent days, trading within a tight range as investors gauge the possibility of an economic recovery and square their positions in the safe-haven asset. Investors have been invigorated by a wave of optimism that has swept Wall Street in recent weeks, buying up stocks, yet not losing sight of the economy’s problems…..Full Article: Source

Commodity trading yet another sign of global economic healing?

Posted on 27 March 2009 by VRS  |  Email |Print

From Seekingalpha.com: I have always been a proponent of understanding models and understanding the assumptions behind models as there are no models for all seasons. Knowing when a model might perform well or not perform well can give an investor insights into the market environment.

I have been watching the performance of the trend following models, as proxied by the returns of the commodity trading advisors, or CTAs. The CTAs, as measured by the FTSE CTA Managed Futures Index, was one of the few groups of hedge funds that showed positive returns in 2008. This year their performance has turned negative…..Full Article: Source

Commodities on agenda at China, Australia talks

Posted on 27 March 2009 by VRS  |  Email |Print

From Australianetworknews.com: Australia’s Foreign Minister Stephen Smith is due to hold talks with his Chinese counterpart in Beijing today. Among the issues expected to be raised is the politically-sensitive, multi-billion link up between Rio Tinto and China’s state-owned aluminium producer Chinalco.

The Australian Competition and Consumer Commission says it’s unlikely Chinalco could control the price of commodities by lifting its stake in Rio Tinto…..Full Article: Source

Itochu to continue to bet heavily on commodities

Posted on 27 March 2009 by VRS  |  Email |Print

From Guardian: Japanese trading company Itochu will continue to bet heavily on commodities, its chief said on Thursday, as its bigger rivals signal a shift in their investment strategy away from commodities.
President and Chief Executive Eizo Kobayashi said Itochu plans to allocate 33 percent to 40 percent of its investment budget to natural resources in the fiscal 2009/10 and 2010/11 years, unchanged from the previous two years, he said…..Full Article: Source

Oil rises to highest in almost four months as equities rally

Posted on 27 March 2009 by VRS  |  Email |Print

From Bloomberg: Crude oil rose to the highest in almost four months and gasoline gained as the U.S. stock market advanced, signaling that fuel demand will increase.

Oil climbed 3 percent as equities rallied on better-than- estimated earnings at Best Buy Co. and ConAgra Foods Inc. The average price of gasoline at the pump rose to $2 a gallon for the first time since November as U.S. supplies fell…..Full Article: Source

New concern about cuts in oil investment

Posted on 27 March 2009 by VRS  |  Email |Print

From Nytimes.com: Sharp reductions in investments and low oil prices could curb future supplies by almost eight million barrels a day within the next five years, according to a study scheduled for release Friday, the latest warning that the world could face a new energy shock when the economy picks up.
The report by Cambridge Energy Research Associates, an oil consulting firm, said that the potential drop in production capacity is a “powerful and long-lasting aftershock following the oil price collapse.”….Full Article: Source

Is there anything called spot crude oil?

Posted on 27 March 2009 by VRS  |  Email |Print

From Commodityonline.com: Readers often ask, “How do I buy the spot price of oil?” The first question to ask is, which oil? West Texas Intermediate (WTI)? Brent Crude? Russian? Saudi Arabian? Oil from Dubai? The OPEC basket price?

The U.S. Energy Information Administration (EIA) does a nice job collecting the weekly average spot oil prices from countries all over the world. Maybe that’s what you’re looking for?….Full Article: Source

Crude higher as economic data better than expected

Posted on 27 March 2009 by VRS  |  Email |Print

From WSJ: Oil futures set a fresh high for 2009 Thursday, on the back of a string of better-than-expected economic indicators. The latest figures, released Thursday, show that the U.S.’s gross domestic product contracted by 6.3% in the fourth quarter.

This wasn’t as sharp of a decline as some economists had expected. ….Full Article: Source

OPEC could cut oil output at next meet: Venezuela

Posted on 27 March 2009 by VRS  |  Email |Print

From Reuters: OPEC could agree on a new oil production cut at the next meeting in May if it is warranted by market circumstances, such as high global crude stocks, Venezuelan Oil Minister Rafael Ramirez said on Thursday.

OPEC decided to leave production flat at its last meeting on March 15 after heavily cutting output at its previous meeting in response to a massive price fall of close to $100 per barrel over a period of six months…..Full Article: Source

Oil at 70-75 dollars a barrel would be ‘fair’: UAE president

Posted on 27 March 2009 by VRS  |  Email |Print

From AFP: An oil price of 70-75 dollars a barrel would be “fair”, the president of the United Arab Emirates said in an interview published on Thursday.

A record high 147 dollars a barrel reached in July was “unreal in our view,” Sheikh Khalifa bin Zayed al-Nahyan was quoted by the official WAM news agency as saying…..Full Article: Source

China encourages energy cos to shop abroad

Posted on 27 March 2009 by VRS  |  Email |Print

From Reuters: China will encourage its energy companies to make more forays abroad to ensure the country’s energy security, an even more important strategy than exploration at home, a senior energy official said on Thursday.

“Appropriately obtaining global resources is our inevitable choice and legal right…Winning foreign resources is even more important than stepping up domestic production,” Liu Qi, deputy head of National Energy Administration, told an industry forum…..Full Article: Source

Climate change targets will not be met unless Government invests in renewables

Posted on 27 March 2009 by VRS  |  Email |Print

From Telegraph: Consumers will have to pay more for their energy if the UK is to meet ambitious climate change targets, according to the former head of BP, as the latest figures show the UK has failed to significantly bring down carbon emissions in the last decade.
The Department for the Environment said greenhouse gases have fallen by two per cent in the last year…..Full Article: Source

Water quality trading likely to grow

Posted on 27 March 2009 by VRS  |  Email |Print

From Environmental-finance.com: Growing problems over water quality means more trading programmes are likely to be introduced, according to a study from the World Resources Institute. But, to be effective, they must have strong drivers to create demand for credits.

Trading programmes work alongside water quality regulations to improve water quality, providing flexibility in how regulations are met and potentially lowering the cost of compliance. They are most commonly employed to control the flow of nutrients into watersheds, for example from waste treatment works or agricultural land, since an excess of nutrients degrades water quality…..Full Article: Source

Japan moving forward with trial carbon trading market

Posted on 27 March 2009 by VRS  |  Email |Print

From Environmentalleader.com: Japan’s trial carbon-trading market is advancing, with 202 participants so far, according to Reuters. Still, the program faces hurdles. A government survey of applicants showed that just 20 percent of the respondents said they would engage in carbon trading.

About 40 percent said they didn’t know and the other 40 percent indicated no immediate plans to trade…..Full Article: Source

Gold is entering a new era, thanks to a major rehabilitation as a global financial asset–CPM

Posted on 27 March 2009 by VRS  |  Email |Print

From Mineweb.com: A report by the CPM precious metals and commodities research group in New York City asserts “gold is entering a new era,” thanks to “a major rehabilitation of gold as a financial asset around the world” as investors look for safe havens in volatile times.

“Not since the Great Depression and World War II has sentiment about the state of financial and economic conditions been so pessimistic,” CPM noted in its newly released Gold Yearbook 2009…..Full Article: Source

Gold price holds its own

Posted on 27 March 2009 by VRS  |  Email |Print

From Telegraph: Gold has risen for a second straight day on speculation the dollar will slide, boosting demand for the precious metal as an alternative asset. Gold and the dollar, which have moved in tandem for most of 2009 as investors sought a haven from financial turmoil, have returned to an inverse correlation.

Analysts said spending by governments to ease the recession may spark inflation, curbing the greenback’s appeal. ….Full Article: Source

Platinum poised for second weekly gain, fifth monthly increase

Posted on 27 March 2009 by VRS  |  Email |Print

From Bloomberg: Platinum headed for its second weekly increase and fifth monthly gain, on investors’ optimism that a rally in equities worldwide signals a rebound in the global economy and improving demand for the metal.

Platinum, used mainly in automobile pollution-control devices and jewelry, has gained 3.3 percent this week as the Standard & Poor’s 500 Index rallied 8.4 percent and the Dow Jones Industrial Average surged 8.9 percent. ….Full Article: Source

Global packages to push up prices of metals

Posted on 27 March 2009 by VRS  |  Email |Print

From Hindu.com: The sharp reduction in inventories and a bias in global stimulus packages towards metal-intensive infrastructure spending around the world could combine to create a new supply and demand imbalance, thereby pushing up prices of metals as well as deal values, according to a report released by leading global consultants Ernst & Young here.

“$2-3 trillion in economic stimulus packages have been announced around the world over the last few months and it is estimated that 30-40 per cent of this will be going into infrastructure…..Full Article: Source

Commerce resources: Tantalum and niobium potential

Posted on 27 March 2009 by VRS  |  Email |Print

From Resourceinvestor.com: When investors talk about the metals markets, they generally get swept up into conversation about copper, nickel and so forth — the popular metals.

However, there is more to the metals sector than just the popular ones. In fact, we often tend to watch the lesser known metals for unique trading and investing opportunities…..Full Article: Source

Will the US dollar remain king?

Posted on 27 March 2009 by VRS  |  Email |Print

From BBC: The dollar’s role as the world’s dominant currency is coming under intense scrutiny. This week, China added its voice to demands for a new global currency as an alternative to the dollar in international trade and finance.

It is worried that the dollar’s value is being eroded by the steps the US is taking to rescue its economy from the worst financial crisis since the 1930s…..Full Article: Source

Global currency flies with push from Russia and slip from Timothy Geithner

Posted on 27 March 2009 by VRS  |  Email |Print

From Guardian: The dollar drops back as China’s proposal for an IMF alternative gains ground. Russia plans to hold an international conference to discuss the creation of a global currency to replace the dollar.

According to the RIA news agency, Andrei Denisov, Russia’s first deputy foreign minister, said: “This proposal is aimed at a practical realisation of the idea about a new global accounting unit or a new global currency. It is a question that should be discussed to create a consensus.”….Full Article: Source

Global currency ‘could save world economy’

Posted on 27 March 2009 by VRS  |  Email |Print

From Telegraph: He might not have received an invitation to next week’s G20 summit, but Kazakhstan’s president-for-life reckons that he might just be the world’s economic saviour.
Nursultan Nazarbayev, the leader of a country best known in the West as the home of the fictional comic character Borat, has proposed the creation of a sole global currency to be called the acmetal…..Full Article: Source

Currency derivatives: Exchanges seek longer trading hours

Posted on 27 March 2009 by VRS  |  Email |Print

From Business-standard.com: The National Stock Exchange (NSE) and the Multi-Commodity Exchange stock exchange (MCX-SX) have approached the Securities and Exchange Board of India (Sebi) with proposals to deepen the currency derivatives market.
The proposals include increasing the number of trading hours, allowing a bigger lot size and trading in other currencies like euro, yen and pound…..Full Article: Source

IndexIQ launches hedge fund strategy ETF

Posted on 27 March 2009 by VRS  |  Email |Print

From Etfguide.com: Investors looking for hedge fund like strategies within an ETF package now have a new choice. IndexIQ, a Rye, NY-based index provider, has just introduced the IQ Hedge Multi-Strategy Tracker ETF which is benchmarked to the IQ Hedge Multi-Strategy Index.

Although QAI does not own or invest directly in hedge funds, it uses hedge fund like investment strategies that include long/short equity, global macro, market neutral, event-driven, fixed income arbitrage, and emerging markets…..Full Article: Source

LME breaks the mould with dividend plan

Posted on 27 March 2009 by VRS  |  Email |Print

From FT: The London Metal Exchange will on Friday break with 159 years of tradition and propose that members receive a dividend payment for the first time.

But the proposal faces opposition at Friday’s annual general meeting from some LME members who support a continuation of the existing system for distributing the profits generated by the exchange. ….Full Article: Source

Tokyo Financial Exchange and Central Japan Commodity Exchange sign MOU

Posted on 27 March 2009 by VRS  |  Email |Print

From Mondovisione.com: The Central Japan Commodity Exchange (C-Com) and Tokyo Financial Exchange Inc.announced that they have signed a Memorandum of Understanding (MOU) to establish a cooperative relationship.

By signing this MOU, C-Com and TFX will exchange information on issues such as the development of new products, trading rules and systems and discuss the potential for further cooperation, to strengthen the function of both exchanges and improve convenience for market participants…..Full Article: Source

China opening steel futures mart, US cool to idea

Posted on 27 March 2009 by VRS  |  Email |Print

From Reuters: The opening of another steel futures market, this one in China, is not enough to convince U.S. manufacturers to embrace public trading in their products.

“Many of our members do not support it,” Nancy Gravett, spokeswoman of the American Iron and Steel Institute grouping major steel producers, said on Thursday…..Full Article: Source

Wheat prices climb as U.S. export sales rise on weaker dollar

Posted on 27 March 2009 by VRS  |  Email |Print

From Bloomberg: Wheat prices advanced for the first time in five sessions after a report showed U.S. export sales increased last week while the dollar slumped.

The U.S. Dollar Index, a basket of six major currencies, dropped 4.1 percent last week, boosting the appeal of U.S. wheat to overseas buyers. The dollar slid after the Federal Reserve outlined plans to buy U.S. debt to ease the credit crunch. ….Full Article: Source

Big funds more wary of commods than ever

Posted on 26 March 2009 by VRS  |  Email |Print

From Reuters: Most big funds that have never touched commodities won’t have the stomach for it now without adequate protection from volatility in the sector since last year’s crash, an advisor to institutional investors said on Wednesday.

“Commodities are quite new to many large institutions and they are going to have to be presented in a format that institutions find digestible and … not too extreme in volatility,” said Carrie McCabe, an industry veteran who works with major investors, including pensions managers……Full Article: Source

Commodities’ recent rally lacks demand

Posted on 26 March 2009 by VRS  |  Email |Print

From WSJ: Some positive numbers are starting to emerge amid the bleak economic picture, giving commodities investors some hope that they are approaching the end of an eight-month rout.

Sentiment has turned positive recently, triggered by the Federal Reserve’s decision to further ease credit. Oil, copper and cotton all have moved up sharply in the past week, a long-awaited break from the vicious slump starting last summer……Full Article: Source

Commodity fund’s assets may double in 2009, Global Advisors say

Posted on 26 March 2009 by VRS  |  Email |Print

From Bloomberg: Global Advisors Ltd., a money manager that returned more than 20 percent in 2008, said the $290 million in its commodity fund may double this year as investors refrain from withdrawing cash.

“Investors need to put money back to work,” Russell Newton, co-founder of the Global Commodity Systematic fund, said yesterday in an interview in London. “I’d be surprised if we don’t double the size of our fund this year.” …..Full Article: Source

Commodity assets advance $20 billion, Barclays says

Posted on 26 March 2009 by VRS  |  Email |Print

From Bloomberg: Commodity assets under management expanded by about $20 billion this quarter, according to Paul Horsnell, head of commodities research at Barclays Capital.

Commodity assets under management slid 22 percent to $154 billion last year, Barclays estimated in a Jan. 26 report. After peaking at $270 billion in the second quarter, assets fell to $211 billion in the following three months, the first drop since 2003, and plunged 27 percent in the fourth quarter……Full Article: Source

Outlook brighter for commodities

Posted on 26 March 2009 by VRS  |  Email |Print

From News.com.au: Australia’s all-important resources sector has clawed back ground this month, buoyed by the first tentative signs that commodities prices have bottomed out.

BHP Billiton has traded above $33 in recent days from a low of $27.11 at the start of March……Full Article: Source

Scotiabank’s commodity price index retreats in February

Posted on 26 March 2009 by VRS  |  Email |Print

From Canadian Press: Scotiabank’s Commodity Price Index, tracking 32 of Canada’s major exports, declined by 3.1 per cent last month compared with January.

That’s down 27.1 per cent compared with February 2008 and 40.1 per cent from its peak in July 2008……Full Article: Source

Money Magazine recommends commodities

Posted on 26 March 2009 by VRS  |  Email |Print

From Istockanalyst.com: The current issue of Money Magazine is quite shocking. I’ve railed against what they’ve been writing for years now about conventional investment advice and, from the looks of the latest issue, you’d think they saw Jim Cramer on the Daily Show and figured they’d better get out ahead of the curve.

As the cover story is not yet on line - The 7 New Rules of Financial Security - there’s something else in the April issue that is online that is well worth sharing, the equally shocking recommendation to buy commodities in this report by senior writer Janice Revell……Full Article: Source

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