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Commodities Briefing 27.Nov 2008

Posted on 27 November 2008 by VRS |  Email |Print

From IHT: Commodities’ fall from grace in recent months has been fast and furious, and further losses cannot be ruled out as the economic and demand landscape deteriorates over coming months.

This will add to deflation fears, but not for long, because many commodities are expected to hit a floor soon as cuts in output curb supplies. The notable exceptions could be copper and oil….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Edhec-risk.com: To analyse the significant variations in oil prices over the past year, EDHEC have produced a new position paper entitled “Oil Prices: the True Role of Speculation,” which argues that, despite the appeal of blaming speculators, supply-and-demand imbalances, the fall in the dollar and low spare capacity in the oil-producing countries were the major causes of the initial sharp rise.

It also identifies many of the excessively opaque facets of the world oil markets and argues that greater transparency would enable policymakers to make sound economic decisions. Oil futures markets are shown to contribute to the greater transparency of oil markets in general. …. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Reuters: Top global miner BHP Billiton, which scrapped a bid for rival Rio Tinto Ltd, expects a 17 percent fall in Chinese steel production, BHP told a shareholders meeting on Thursday.

BHP also forecast continued weakness in commodities and said it would respond it any of its operations were to lose cash. BHP declared the bid officially had lapsed on Thursday, after the European Commission closed its investigation on the deal, first proposed a year ago….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From WSJ: “Soft” commodities are toughing out the hard times. Sugar, cocoa and coffee have outperformed energies, metals and even grains this year. The resilience is thanks to the recession argument that “people still have to eat.”

In recent weeks, all three commodities have shown resilience after a period of falling prices. Sugar and cocoa are among the few commodities up for the year, 7.3% and 11%, respectively, while the overall Dow Jones-AIG Commodity Index is down 35%. Coffee is down 17%….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Bloomberg: Commodity prices may fall a further 10 percent to 15 percent before nearing the end of their decline next year as a faltering world economy stifles demand for raw materials, Australia & New Zealand Banking Group forecast.

Crude oil is the “most vulnerable” and may fall as low as “late $40s” a barrel, Geoff Clear, executive director and head of commodities, said today. Copper may “disappoint” despite tight supply, while zinc and lead may fare better, he said….. Full Article: Source&sid=aUYRVoa15Yao&refer=commodities

Posted on 27 November 2008 by VRS |  Email |Print

From Bullionvault.com: Dennis van Ek, a principal at Mercer in Amsterdam has claimed today (November 26th) that gold prices could eventually hit $9,000 per ounce in 2015.

He has explained that he believes buying gold is the ultimate insurance policy against other currencies around the globe imploding….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Investingblog.org: The market still needs to settle out the speculation and digest much of the speculative supply that is rushing into the markets. Other commodities such as silver are now on the radar with a rapidly expanding money supply and a heavily deflated price per ounce.

The metals bust happened far before that of oil and was not as well covered….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Reuters: Commodities’ fall from grace in recent months has been fast and furious and further losses cannot be ruled out as the economic and demand landscape deteriorates over coming months.

This will add to deflation fears, but not for long because many commodities are expected to soon hit a floor as output cuts curb supplies. The notable exceptions could be copper and oil….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Globalpensions.com: Gold reached its highest price ever in March this year when it hit US$1,000 an ounce. Though it has since fallen back from those giddy heights, it was still trading at around US$740 an ounce in mid-November.

And while gloom and uncertainty look likely to dominate the outlook at least for the foreseeable future, the glittering allure of gold looks likely to get stronger….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Sfgate.com: A turkey dinner with all the trimmings will cost more this year as food prices remain stubbornly high despite an economic crash that has, among other things, driven down the price of gas.

But after this day of thanks, experts say, the cost of eating will slowly decline now that the commodity bubble that had driven up food prices continues to subside….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Investors.com: Gold pulled back slightly Tuesday and Wednesday following three straight days of sharp gains. The rally lifted the yellow metal above its 10-week moving average for the first time in more than a month.

Its strength goes hand in hand with weakness in the dollar as it takes more dollars to buy the commodity, which is traded in the U.S. currency….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From News.com.au: BHP Billiton expects Chinese steel production to drop 17 per cent year-on-year amid the financial crisis, but says emerging economies, particularly China, will drive natural resources demand growth.

The company says it is better placed than any other major miner to withstand the global financial and commodities markets turmoil….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Stuff.co.nz: The dairy industry continues to be buffeted by the global economic downturn, with sharemarket operator NZX’s Agrifax dairy index showing a 5 percent fall in November.

The index fell 70 points to 1255 this month, down from 1325 in October, and well below its peak of 1474 six months ago….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Financeasia.com: In a crisis, gold really comes into its element as a safe haven investment, and this time is no different as investors rush for the precious metal at an unprecedented rate.

According to the World Gold Council, demand for gold was at an all time high at $32 billion in the third quarter – 45% higher than the investment record set in the previous three months….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Commodityonline.com: Stories of investors committing suicide after losing out in stock market are obsolete. But what are not coming to surface are stories of big entrepreneurs who have gone bust in commodities market.

So are the players in commodities better equipped to handle the crisis than those in the stock market? The answer lies in the testimonies of hundreds of ‘big fishes’ who lost heavily in crude oil speculation….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Forbes: The Canadian dollar dipped 0.4 percent against the U.S. dollar Wednesday on worries over slackening demand for Canadian commodities, but it closed well off its lows for the day as North American stock markets rebounded and commodity prices made gains.

Canadian bond prices rallied along with the larger U.S. market on weaker-than-expected U.S. data, which increased the allure of safe-haven government debt….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Guardian: As a global economic crisis deepens, gold has not only held firm in dollar terms but also appreciated against other non U.S. currencies, and strong physical buying despite higher prices signals the metal has legs to rally further.

A flight to safety amid economic uncertainties has bolstered the dollar and the yen, which hurt dollar-denominated gold and made bullion more expensive when priced in other currencies….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

NASDAQ OMX Commodities and Nord Pool Spot AS have been chosen by the Futures & Options Association (FOA) in UK to establish a spot and cash-settled derivatives power market with a full range of clearing services.

FOA has chosen the consortium NASDAQ OMX Commodities and Nord Pool Spot for the delivery of market and clearing services for the UK Wholesale Power Market. The parties plan to establish the exchange within Q2 2009. Nord Pool Spot has experience from operating power markets since 1993, while NASDAQ OMX supplies exchange technology to over 60 financial marketplaces in over 50 countries….. Full Press Release: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Theaustralian.news.com.au: Copper rose almost 4 per cent to as investors bet a rate cut in China, the world’s top consumer of the industrial metal, could help boost growth and demand.

However, metals trimmed some of their gains as the US dollar rose against the euro later in the day on renewed risk aversion and European shares fell along with Wall Street, dragged down by weak US data that fanned recession fears….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Guardian: OPEC ministers will debate a deep cut in oil supply when they meet this weekend in Cairo for urgent talks aimed at arresting a downward price spiral that sucked oil below $50 a barrel.

They have downplayed the prospect of any decision until a policy-setting meeting in Algeria on Dec. 17, but OPEC needs to send a strong signal of its intention to remove more supply or the risk is oil prices will hurtle lower still….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Guardian: There has never been a more important time to invest in green technologies, yet many of us believe these efforts are doomed to failure. Myth 1: solar power is too expensive to be of much use.

In reality, today’s bulky and expensive solar panels capture only 10% or so of the sun’s energy, but rapid innovation in the US means that the next generation of panels will be much thinner, capture far more of the energy in the sun’s light and cost a fraction of what they do today….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Guardian: European Union negotiators are considering allowing state aid to companies hit by any increases in electricity prices due to the cost of permits to emit carbon dioxide, a document seen by Reuters on Wednesday showed.

The measures are aimed at easing the risk that manufacturers could move overseas to avoid the cost of buying permits to pollute under the EU’s flagship Emission Trading Scheme (ETS), which is central to the bloc’s efforts to fight climate change….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Financialexpress.com: Notwithstanding the global financial crisis, India would push for larger financial allocation by the developed countries towards climate change mitigation and adaptation in the forthcoming meet under the United Nations Framework Convention on Climate Change (UNFCC).

“Funds accumulated under the Clean Development Mechanism (CDM) is in adequate to take up any mitigation work as the current scale of funding in really small,” Vijai Sharma, secretary, ministry of environment and forest said….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Mineweb.com: Among the world’s gold bulls, investment in the yellow metal seems to be the answer to all evils and in times of financial and political crisis, as at the present, they may well have a point.

Whether it is protection of one’s wealth against inflation or against deflation - two diametrically opposed potential consequences of the current global financial breakdown (and fears of the former seem to be changing to perhaps the even more worrying latter possibility) - both seem to be assessed to be positive for gold. Or at least less negative for gold than for most other investments….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

Nodal Exchange, the first independent electronic commodities exchange for forward locational electric power trading, announced today that it completed successful mock auctions for potential participants of the exchange.

These mock auctions were held November 18th and 19th, 2008, in preparation for Nodal Exchange’s early 2009 launch. Over 50 entities signed up to participate in these mock auctions. These entities account for 85% of the recent prompt month congestion trading in the four Regional Transmission Organization (RTO) markets Nodal Exchange will be initially supporting: PJM, MISO, NYISO, and ISO-NE. In addition, the mock auction included participants who do not currently trade in the congestion markets, but are looking forward to trading on Nodal Exchange because of the more frequent auctions and clearing of all nodal transactions….. Full Press Release: Source

Posted on 27 November 2008 by VRS |  Email |Print

From FT: The cost of shipping dry bulk commodities such as iron ore, coal and grains plunged to a near 22-year low on Wednesday, as worldwide demand for raw materials continued to decline.

The Baltic Dry Index, a global benchmark, fell 5.1 per cent to 762 points, the lowest level since January 1987. The index has tumbled 93.5 per cent since reaching an all-time high of 11,793 points in May….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Livemint.com: The world sugar deficit for the year ending 30 September may be “at the low end of estimates” at 1 million tonne (mt), said Christoph Berg, managing director of research company FO Licht.

“That’s taking into account the world economic outlook as a result of the financial crisis and how it affects consumption, particularly of Asian markets,” he said….. Full Article: Source

Posted on 27 November 2008 by VRS |  Email |Print

From Modbee.com: Gold prices fell Wednesday on investors’ continuing concerns about a drop in demand, but other commodities rose, buoyed by a sustained advance on Wall Street.

Commodities prices have largely been tied to the direction of equities in recent weeks, as investors worried about a weakening economy fled both stocks and futures contracts for the shelter of safer investments like cash and Treasurys…. Full Article: Source

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