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Commodities Briefing 29.Oct 2008

Posted on 29 October 2008 by VRS |  Email |Print

Opalesque Report: As if the global meltdown witnessed in commodities in the last few weeks was a nightmarish dream, the Indian New Year Samvat 2065 (known as Diwali muhurat trading) started on an optimistic note on Tuesday. Bombay Stock Exchange Index (Sensex) sees highest gain in a decade on new year day trading.

Agri commodities light up on on the National Commodity and Derivatives Exchange (NCDEX) on Diwali (festival of lights) day. Owing to stockiest buying in future market enabled the most of the agri commodities to garner impressive gains in today’s trading. However, most of the physical market remained close for today.

The stock market stepped into the new year on a positive note in the hour-long ‘muhurat’ trading in the evening, with the Sensex clocking its highest Muhurat-day gain of 499 points. But last year at the same time, the benchmark index in Mumbai was at 18,907.6 points.Elsewhere in Asia, key markets rebounded smartly.

The stock market in India’s financial capital is closed for normal trading for the festival, but opened for an hour of token one-hour Muhurat trading in the late evening as Diwali is considered the best time to make new investments.

The session in which traders seek the blessings of the Hindu goddess of wealth Lakshmi in hopes of prosperity in the coming trading year has taken on new importance given the slide triggered by the global financial crisis.

Posted on 29 October 2008 by VRS |  Email |Print

From FT: Commodity markets managed an early rally in Tuesday’s session but the recovery ran out of steam after US consumer confidence data showed sentiment collapsing to a record low in October.

The US data fuelled fears that demand for commodities would suffer in a global economic recession that is increasingly seen as likely following the worldwide crisis in financial markets….. Full Article: Source

Posted on 29 October 2008 by VRS |  Email |Print

From Citywire.co.uk: Investors will be able to access the rapidly growing carbon futures market later this week with the launch of the world’s first carbon exchange traded commodity (ETC) on the London Stock Exchange.

The ETF Securities Carbon ETC is designed to track the price of carbon emissions allowance futures and offer investors a total return – the return an investor can earn by holding a long only, fully collateralised position in commodity futures….. Full Article: Source

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From Theaustralian.news.com.au: Copper gained nearly 3 per cent, recovering from its previous session’s 3-year low amid a global recovery in equity markets. Strong US housing data this week also helped to improve sentiment about economic growth.

Copper for three month delivery on the London Metal Exchange closed at $US4130 per tonne, up $US110 from the previous session, after rallying to a session high of $US4193 a tonne. …. Full Article: Source

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From Washingtonpost.com: The world’s currencies experienced another wave of almost unprecedented volatility, reversing some of the dramatic shifts of recent days.

The Japanese yen fell 5.25 percent against the dollar, its biggest one-day swing since 1974. But its value is still up 12 percent this year. The yen has moved more than 1 percent against the dollar 10 times this month. In October 2007, it didn’t move that much even once. …. Full Article: Source

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From Nasdaq.com: China warned Wednesday its heavy dependence on coal made it difficult to control greenhouse gas emissions, even as it said fighting climate change was a top priority.

In a 44-page policy paper, the government said the adverse impact of rising temperatures was forcing it to better balance environmental protection and economic development, although taking action would be hard. “(The) coal-dominated energy mix cannot be substantially changed in the near future, thus making the control of greenhouse gas emissions rather difficult,” the paper said….. Full Article: Source

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From Theaustralian.news.com.au: The head of the OPEC oil producers cartel warned overnight that it could cut output again if prices keep falling, despite an emergency cut in output last week.

OPEC, which produces 40 per cent of the world’s crude, could hold a new emergency meeting before its next scheduled session in December, the Organization of Petroleum Exporting Countries (OPEC) Secretary General Abdalla Salem El-Badri said….. Full Article: Source

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From Financeasia.com: Banks are increasingly reluctant to issue new letters of credit as price swings cause orders to be cancelled and prompt some buyers to renege on contracts.

The sharp swings in commodity prices are proving to be a challenge for Asia’s trade finance banks, as they face a trade-off between declining oil prices, which help to lower shipping costs, and surging credit rates. Several months ago, the cost of freighting cargo was almost higher than the cost of the underlying product being shipped….. Full Article: Source

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From Globeinvestor.com: The Scotiabank Commodity Price Index lost ground for the second consecutive month, tumbling 6.8 per cent in September as hedge funds unwound positions in the resource sector.

The monthly decline in the index, which measures price trends in 32 of Canada’s major exports, was led by a 10.6-per-cent drop in the oil and gas sector, and an 8.9-per-cent decline in agriculture. These are two areas where hedge fund outflows from futures markets have been the greatest, according to the Scotiabank report released Tuesday….. Full Article: Source

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From Guardian: Fears of collapsing world demand and investors’ need for cash have hammered copper but prices for delivery beyond 2010 are proving more resilient, due to lingering worries about tight supplies.

Copper futures for three-month delivery traded on Tuesday down at around $3,825 a tonne on the London Metal Exchange — more than 50 percent below the record high of $8,940 a tonne set on July 2 for the metal, which is used in power and construction….. Full Article: Source

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From Csmonitor.com: Asian stocks snapped a losing streak Tuesday, after scraping multiyear lows in recent weeks. Japan’s Nikkei index closed up 6.4 percent, as South Korea saw a 5 percent hike in its main index. Hong Kong’s volatile market posted double-digit growth a day after falling by almost as much.

These fragile gains come in the face of increasingly gloomy forecasts for the region’s export-led economies as the US and other rich countries slip into recession. As in other emerging markets, among the heaviest sellers of Asian assets have been US hedge funds and other foreign investors who need to raise cash in a hurry. This flight of foreign capital has dented confidence in stocks, bonds, and other assets….. Full Article: Source

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From ABC: The convenor of a national carbon trading conference says delegates are concerned about the impact the global economic downturn could have on the growing sector. Companies that measure carbon emissions, generate offsets and design and sell energy-efficient products are represented at the Gold Coast forum that begins today.

Conference director Michael Whitehead says it would be counterproductive to delay carbon trading in Australia, despite current economic challenges….. Full Article: Source

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From Mineweb.com: BMO’s Bart Melek notes that the sentiment at the recent LME Week was not as bearish as one would expect given that many metal prices are so low and some miners are operating below cash costs.

Participants at the recent London Metal Exchange Metals Seminar 2008 in London expect metals to be under pressure, but are optimistic about their long-term future owing to strong developing world demand and the potential for tight supply/ demand conditions….. Full Article: Source

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From Commodityonline.com: Is it boom or gloom time for commodities? Experts may wax eloquent on this for weeks after the global market meltdown. But a clear indication emerging across the globe is that commodities now hold a charm not only for investment wizards like Jim Rogers but also for institutional investors worldwide.

The only difference now is that investors are becoming more diversified and more sophisticated in their approach towards commodities….. Full Article: Source

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From Guardian: Oil prices dipped below $63 a barrel on Tuesday as concerns about faltering demand offset OPEC comments suggesting the producer group could throttle back output again to support prices.

U.S. crude settled down 49 cents at $62.73 a barrel, before rising to $64.10 in post-settlement trade. London Brent crude settled $1.12 lower at $60.29 a barrel….. Full Article: Source

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From Taipeitimes.com: The Cabinet will propose a plan by the end of the week to lower commodity prices that have been pushed up by this summer’s soaring prices of crude oil, Premier Liu Chao-shiuan said yesterday.

During the plenary session at the Legislative Yuan yesterday morning, Democratic Progressive Party legislators Tsai Huang-liang and Chen Chi-yu asked why domestic commodity prices remained high despite the drop in international crude oil prices to around US$62 a barrel….. Full Article: Source

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From Guardian: BP was at the centre of a huge row yesterday after unveiling record quarterly profits of $10bn (£6.4bn) - a rise of 148%. Critics rounded on the oil company, accusing it of profiteering and renewing calls for a windfall tax.

However, City analysts hailed the results, which were about $2bn higher than expected, arguing they showed the impact of operational improvements within BP as well as a higher oil price….. Full Article: Source

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From Thanhniennews.com: Indonesia, the world’s biggest producer of palm oil and Asia’s second-largest for coffee, plans to hold more talks with Malaysia and Vietnam in a bid to stem price declines.

“We have discussed this on a bilateral basis,” Indonesian Agriculture Minister Anton Apriyantono told reporters on Sunday, referring to measures to support commodity prices. Robusta coffee is down 41 percent from its US$2,815 a ton peak on March 6. Vietnam is the world’s largest grower of robusta coffee….. Full Article: Source

Posted on 29 October 2008 by VRS |  Email |Print

From Indiatimes.com: The National Stock Exchange (NSE) of India has pipped rival stock exchanges in terms of attracting the largest number of members in the recently-l
aunched currency futures segment.

The country’s largest stock exchange, which was also the first to launch currency derivatives, has raced ahead of its two rivals — the Bombay Stock Exchange (BSE) and the Multi Commodity Exchange of India (MCX). NSE has also been registering impressive volumes in this segment, with more than 100,000 contracts being traded in a single trading session….. Full Article: Source

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From Ninemsn.com.au: Platinum dropped more than 3 percent on Wednesday on fears of falling demand for autocatalysts after automakers cut sales due to a weakening U.S. economy.

By 0055 GMT, platinum was trading at $781 an ounce, down $28 from New York’s notional close on Tuesday — well below a record high of $2,290 struck in March.Auto retailers swung to quarterly losses in the third quarter, hit by the decline in U.S. car sales, tight consumer credit, and a weakening U.S. economy as well as hurricane-related damages. …. Full Article: Source

Posted on 29 October 2008 by VRS |  Email |Print

From Bloomberg: The Australian and New Zealand dollars jumped the most in more than two decades against the yen as a rally in U.S. stocks and reports Japan may cut rates prompted speculation investors will buy higher-yielding assets.

The currencies advanced against the dollar after prices of commodities the two nations export gained. The Nikkei reported yesterday the Bank of Japan may reduce its target lending rate by 0.25 percentage point. The South Pacific nations’ dollars rallied yesterday as the Reserve Bank of Australia bought its own currency for the third day amid declines. …. Full Article: Source

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From Todayonline.com: Venezuela would support further production cuts beyond those proposed by the OPEC producers cartel designed to stabilize oil prices, visiting President Hugo Chavez said Tuesday.
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OPEC ministers agreed at emergency talks last week to slash oil output by 1.5 million barrels a day in a bid to shore up crude prices, which have plunged from highs of around 150 dollars a barrel to below 60 dollars….. Full Article: Source

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From Mineweb.com: Mega miner Rio Tinto still wants to tread its own path despite the worldwide financial crisis, but will be looking at all its upcoming capital commitments to see if savings can be made.

The financial meltdown won’t push Rio Tinto to reconsider a takeover bid by BHP Billiton but the global miner is rethinking its capital investment projects around the world, its chief executive said on Tuesday….. Full Article: Source

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From Signonsandiego.com: Brazil and Mexico led a firm recovery of Latin American markets Tuesday, mirroring gains on Wall Street and boosted by positive results from major commodities companies.

Even Argentina’s Merval index rebound impressively from mid-afternoon negative trading sessions to close up 6.58 at 895.06. …. Full Article: Source

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From Guardian: Hints of where EU ministers might compromise on agriculture policy reforms began to emerge on Tuesday, with ideas floated for the dairy sector, the future of direct subsidies and cash for rural development.

Officials and diplomats monitoring a two-day meeting in Luxembourg suggested possible solutions for a string of known “difficult areas” in a plan for reshaping EU farm regimes, known as the “health check” of the Common Agricultural Policy….. Full Article: Source

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From Canada.com: Markets around the world staged a powerful rally Tuesday as hopes for further deep cuts in U.S. interest rates trumped fears of further economic weakness there and here.

Evidence that the U.S. housing market has not yet hit bottom, news that U.S. consumer confidence has plunged to an all-time low, and a forecast here that there will be no growth in Canadian exports next year, temporarily dampened, but failed to derail the rally that erupted in Asia, then swept through most of Europe and continued unabated in North America….. Full Article: Source

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