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Commodities Briefing 15.Oct 2008

Posted on 15 October 2008 by VRS |  Email |Print

From Guardian: Commodity funds are struggling to regain a footing after a record fall in futures prices last week suggested to many that more liquidation could be in store for a sector that lost up to $60 billion in the last quarter.

Some investors in commodities had hoped that the worst was over for investments in raw materials after a broad rally on Monday. But most commodity prices slipped again on Tuesday amid worries about the credit crisis and its impact on the global economy, which also pushed stock markets lower after their one-day rally…… Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Theaustralian.news.com.au: Market volatility is creating opportunities for investors seeking diversification, with commodities highlighted as a good buy in the market environment.

Credit Suisse portfolio manger Christopher Burton said yesterday commodity investments created diversification benefits and that now was a very good time to be purchasing. But a sudden rush to commodities is not expected, as most investors are effectively paralysed in their current portfolios…… Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Reuters: Option investors on Tuesday appear to be betting that natural gas prices will heat up within the next few months as they accumulate call options on an exchange-traded fund tied to the commodity product.

Shares of the United States Natural Gas Index UNG.A rose 1.58 percent, or 47 cents, to $30.20 in afternoon trade. The fund, which tracks natural gas prices through futures and forward contracts, notched a 52-week low of $29.02 on Friday…… Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Mineweb.com: As most commodity prices have continued to plunge, and commodity stocks have fallen even faster, could we be nearing, or at, the bottom? If so there are bargains to be had out there.

The market has moved beyond logic to serious panic as evidenced by not only the enormous declines in commodity stocks, but in stocks in general. Blue chips have fallen alongside those with less illustrious antecedents. Only gold seems to be bucking this trend and here price movements have been volatile - up $50 one moment, down $50 the next…… Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Bloomberg: Gold fell for the fourth straight session after the U.S. agreed to spend $250 billion to rescue ailing banks. Silver climbed.

Stocks in Europe and Asia rose for a second day after Treasury Secretary Henry Paulson announced plans to buy stakes in financial firms to ease the lending crisis. Gold fell 1.9 percent yesterday as the Standard & Poor’s 500 Index soared 12 percent…… Full Article: Source

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From FT: The mining and metal industry is bracing for months of price weakness as slowing demand in the US, Europe, Japan and some emerging markets, including China, is likely to push commodities such as copper into surplus.

At the London Metal Exchange annual dinner last night, the premier gathering of the industry in London, the mood among traders, bankers and mining executives was gloomy, particularly with regard to the short term…… Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Chron.com: Grain prices fell sharply Tuesday after Wall Street’s failure to extend the previous day’s massive rally prompted investors to pull money out of commodities.

Stocks ended trading moderately lower as investors cashed in profits following the Dow Jones industrials’ stunning 936-point advance on Monday. Soybeans for November delivery fell 32 cents to settle at $8.96 a bushel on the Chicago Board of Trade, while wheat for December delivery lost 15.5 cents to settle at $5.73 a bushel…. Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Gulf-daily-news.com: Capivest is taking a positive outlook for the world’s energy markets amid global financial market uncertainty. This confidence follows Capivest’s recent announcement of the successful initial closing of its new Alternative Energy Fund, provided in co-operation with Goldman Sachs devoted to the energy commodities.

“We are at an important crossroad in global capitalism with many markets, particularly in the West, now dependent on government aid to continue to function,” said Capivest executive director of treasury and financial institutions Hasan Habib Hasan…… Full Article: Source

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From Bloomberg: The European Union may approve new climate-change rules by year-end though it could be a “challenge” to fund the changes that polluting industries must make, EU Environment Commissioner Stavros Dimas said.

The worldwide financial crisis unfolding right now should not derail the bloc’s plans to curb the discharge of greenhouse gases that add to global warming, he told reporters today in Warsaw…… Full Article: Source

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From Rttnews.com: The US dollar traded lower against its major Latin American counterparts during New York trading on Tuesday. The greenback ticked down to an 8-day lows against the Brazilian real and the Colombian peso in today’s North American deals.

The US dollar ticked down against its Brazilian counterpart during New York morning deals on Tuesday. At 9:15 am ET, the dollar-real pair dropped to an 8-day low of 2.0405, compared to Monday’s closing value of 2.1285. Thereafter, the pair reversed its direction and as of now at 2.0710….. Full Article: Source

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From WSJ: Oil prices are locked in an epic struggle: Which is going to pull harder? The downward tug of slumping economies around the world, or the upward pull as oil-producing countries tighten spigots to defend their wealth?

Figuring out what oil should cost is no easy task, because in today’s world of Asian economic growth, resource nationalism, and flat-lining oil-field technology, history isn’t the best guide. Deutsche Bank figures oil will cost about $92.50 a barrel next year, but given all the pessimism that’s roiled oil markets in the past week, it also set out to figure just how low oil could go……. Full Article: Source

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From Resource Investor: The future of climate change policy is very uncertain due to economic, environmental, and political complexities. This article quantifies the economic cost of delaying action to reduce carbon emissions and argues that the best strategy is to hedge our bets by adopting a mild emissions reduction policy now rather than naïvely waiting for the uncertainties to be resolved.

Despite growing concerns about climate change, there is little consensus about the scale and timing of actions needed to respond to it. International negotiations on an effective climate policy have been stalling for almost a decade now, and those currently underway might fail to reach a comprehensive agreement in the near future. ….. Full Article: Source

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From Mineweb.com: Base metals prices have bounced due to an anticipated recovery of financial markets sparked by efforts to recapitalise banks.

Base metals surged on Tuesday, with London copper futures up as much as 7.5 percent, steaming alongside rises in the region’s equity markets as a global effort to recapitalise banks sparked a broad recovery…… Full Article: Source

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From AFP: Australia’s plans to introduce a carbon emissions trading scheme by 2010 will not be delayed by the global financial crisis, Prime Minister Kevin Rudd said.

Rudd is under increasing pressure to defer the scheme, which will set an overall limit on the amount of carbon emissions the economy can produce, given its cost to businesses already grappling with the credit crunch. But the premier, who announced a 10.4 billion dollar (7.25 billion US) economic stimulus package to counter the slowdown caused by the world financial crisis, said the environment remained a priority…. Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Financialexpress.com:Traditionally, commodities have always driven a spike between industrialised economies and developing ones.

This has been a normal trend as raw material prices have been soft and yielded adverse terms of trade vis-à-vis value-added industrialised exports. Add price volatility to that; it is yet another unwelcome dimension for commodity exporters. Even then, it was during the commodity boom that the christening occurred of Brazil, Russia, India and China. They became Bric in 2003 under the aegis of Jim O’Neill of Goldman Sachs…… Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Nationalpost.com: In the past couple of weeks, analysts started to make drastic cuts to their targets for base metal companies to account for tumbling commodity prices and a larger-than-expected economic downturn. Scotia Capital analyst David Christie has taken the next step, and cut gold and silver companies as well.

The problem for precious metal companies is that they often produce base metals like copper and molybdenum as byproducts in their mines. So while they are not hit as hard as the base metal companies themselves by the lower prices, they still take a hit…… Full Article: Source

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From Wam.org.ae: J.P. Morgan has taken an equity stake in the Dubai Mercantile Exchange Limited (DME) joining a number of other leading global financial institutions and energy trading firms, including Goldman Sachs, Morgan Stanley, Vitol, Concord Energy, Casa Energy Trading, and a Shell Group company, who were announced as strategic investors in the DME in early August.

DME’s Board of Directors approved the issuance of an equity stake of up to 20% to strategic investors, with core shareholders New York Mercantile Exchange, Inc. (NYMEX, whose parent, NYMEX Holdings Inc, was recently acquired by the CME Group), Tatweer, a member of Dubai Holding, and the Oman Investment Fund collectively holding a 75% equity stake in the Exchange…… Full Article: Source

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From Chicagotribune.com: Regional alliances enlist cap-and-trade approach to curtail greenhouse gases. In what are likely to be blueprints for a national effort to fight climate change, clusters of states on the East and West Coasts and in the Midwest are setting up marketplaces for electric utilities and other companies to buy and sell credits to emit carbon dioxide and other gases responsible for global warming.

Building on a voluntary market system pioneered in Chicago, 10 Northeastern states recently launched what they are billing as the biggest, most coordinated effort yet in the U.S. to take on climate change by mandating that electric utilities take part in an emissions-allowance trading program….. Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Guardian: Just a couple of months ago, the FTSE 100’s mining companies were riding high on the back of high demand for commodities, particularly in China. But fears of a global recession have severely affected commodity prices, sending shares in mining stocks into freefall.

Today, however, the miners were back in business, boosted by a 2% rise in the gold price and a rally by the FTSE 100 of almost 200 points….. Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Indiatimes.com: To curb the losses from stock market slowdown and rising inflation levels, analysts are suggesting having gold in one’s portfolio, since the purch asing power of the metal does not diminish even during economic pressures.

While investing in physical gold, as against the option of buying jewellery which involves cost of wastage and making charges, one may prefer buying gold bars/biscuits/coins. You can be assured of purity when you buy gold from banks. However, you should also know that banks don’t buy it back…… Full Article: Source

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From Theaustralian.news.com.au: The 680-page final report on the impact of Australia of climate change will be published tomorrow - after its publishers paid for carbon credits to make up for the environmental damage caused by printing it in the first place.

Professor Ross Garnaut’s report, released online last month but largely overlooked by media coverage which was instead focusing on that day’s Wall St meltdown, spells out how climate change will affect this country and what can be done about it….. Full Article: Source

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From Mineweb.com: A little lift in market sentiment, and investors raise the value of listed iron ore stocks by billions of dollars. Following glimpses of hope that the global credit markets crisis has eased, investors raised the value of listed iron ore stocks by tens of billions of dollars on Tuesday.

The charge was led by Australian investors; the stock price of advanced developer-miner Fortescue rose by 55 percent on the day, increasing the market value of the stock to USD 8.6bln. The buying of iron ore specialists was widespread and determined on the day in Australia, one of the world’s leading iron ore countries. Stocks such as Strike, Admiralty, Gindalbie, United Minerals and Western Plains finished higher by more than 20%….. Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Bloomberg: Canada’s currency strengthened for a second day, its longest winning streak in more than two weeks, as global stock markets rose and prices for commodities such as crude oil advanced.

“When we see more up days in equity markets, it tends to equate to risk appetite, and by extension, a bid for commodity markets and commodity-market currencies,” said Jack Spitz, a managing director of foreign exchange at National Bank of Canada in Toronto. “That equates to a stronger” Canadian currency…… Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Reuters: NYSE Liffe, the U.S. futures exchange of transatlantic exchange operator NYSE Euronext NYX.A, said it has picked the Options Clearing Corp to clear its precious metals futures contracts.

The OCC, the world’s largest derivatives clearing organization, will provide clearing for NYSE Liffe before the end of the first quarter of 2009, a statement said. NYSE Liffe, launched on Sept. 8, offers trading in futures and options in gold and silver contracts and said it plans to expand its product offerings in the coming months….. Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Ameinfo.com: The credit crisis has continued to deepen recently causing many financial institution casualties around the globe. Investors have worried that the crisis also hurts the economy, resulting in lower global demand for oil. Reflecting this, the WTI-oil price dropped roughly 40% from its July peak of $147 per barrel.

Goldman Sachs recently slashed its forecast for crude oil prices in New York as concerns that the global credit crisis could lead to weaker demand outweighed supply constraints. Analysts at Goldman cut its three-month benchmark West Texas Intermediate crude oil estimate to $115 a barrel from $149. …. Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Mineweb.com: With the financial markets responding well to the actions of the major central banks and looking for a thaw in the recent freeze, how have the metals behaved in a wider context, and what is the outlook now? Gold seems to be the answer whichever way we look.

With all the mayhem and volatility of recent weeks it is worth standing back a little and gaining a sense of perspective. This will, piece therefore be redolent with numbers in a brief examination relative performances in order to see what can be gleaned in terms of the prospects as, the markets possibly return to something approximating to normality - although this of course, may yet take some time….. Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Theaustralian.news.com.au: OIL prices fell on the risks of months of weak demand even if the US succeeds in preventing the economic downturn from deepening. Light, sweet crude for November delivery settled $US2.56, or 3.2 per cent, lower at $US78.63 a barrel on the New York Mercantile Exchange.

November Brent crude on the ICE futures exchange closed down $US2.73 at $US74.73 a barrel. Oil prices and equities moved closely together as the two markets plunged last week, but since Monday equities have received a bigger boost from a US government plan to buy shares in major banks…… Full Article: Source

Posted on 15 October 2008 by VRS |  Email |Print

From Forbes: Commodities rose for a second day on Tuesday, repairing a little of the damage done last week in a charge out of financial markets that saw many prices fall by record amounts.

Efforts by governments around the world to restore a little faith in the banking sector by guaranteeing deposits and pumping in equity gave markets from New York to Tokyo a big leg up, lifting investor sentiment and sending money back into commodities too…… Full Article: Source

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