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Commodities Briefing 09.Jan 2009

Opalesque Exclusive: Update - Creststreet to launch offshore version of alternative energy fund, onshore returned 142% in 2008
Recession resistant coal industry cuts back
Base metals rally set to run out of steam
U.S. metals, mining companies brace themselves for rough new year - S&P
Commodity sector could face supply shortages
Oil: USD30 per barrel by February say Goldman
China’s exports probably declined most in a decade in December
Brazil corn, soy output may fall more than forecast
Supply concerns push cocoa close to 23-year high
China to build up commodity reserves
Global warming could hurt crop yields: study
China's first ecological compensation trade licensed
Energy panel shake up signals action on climate
Why futures markets are important
The silver bulls are back
Will Gold be beaten down like other commodities?
Gold - and a little silver - dominate
Should Britain join the euro party?
European Commodity Clearing extends clearing contract with Deutsche Börse systems
Clear OTC trades to make markets safer - Nasdaq CEO
SEC needs to merge with CFTC: Nasdaq CEO
NCDEX launches gold and silver contracts
Demand for UK equity ETFs rises
Norway's 2008 oil output down, gas sales up
North Sea oil exploration firm collapses
Christmas sales in US disappoint
Oil drops nearly $1 on economic gloom
Platinum gains for sixth day on demand; gold little changed
Nickel leads base metals lower
Copper declines amid economic worry, inventory builds
Gold prices advance moderately as dollar weakens

Posted on 09 January 2009 by VRS |  Email |Print

From the Opalesque Team: Toronto-based commodity funds house Creststreet is finally launching the offshore version of its Creststreet Alternative Energy Fund. It was initially meant to be launched in 2008’s fall.

To December 31, 2008, the Creststreet Alternative Energy Fund achieved a 1 year return of 142.1%, compared to -38.4% for the S&P500 and -69.9% for the WilderHill Clean Energy index. It was launched in November 2007, and returned 34.8% that year (December report).

In February 2009, Creststreet will be launching the marketing of the Creststreet Alternative Energy Opportunities Fund Inc., an offshore version to be run pari-passu with the existing onshore alternative energy fund. The capacity of the offshore fund will be capped at Cdn$100m with initial closing expected to be on March 31, 2009. Creststreet will be marketing in New York City and area from January 28th to February 2nd, and in Europe from February 9th to the 20th. Contact: +1 (416) 628-6508, mhammond@creststreet.com.

Opalesque Note: see our October exclusive on the fund.
Canada shop Creststreet plans to launch an offshore alternative energy fund later this fall, onshore version returned 209% since November 2007 inception
Article Source: http://www.opalesque.com/47576/Canada_shop_plans_to.html

Posted on 09 January 2009 by VRS |  Email |Print

From Macon.com: The ailing economy has left a big question mark hanging over the U.S. coal industry: will last year’s high-priced contracts and today’s declining costs be enough to offset rapidly falling world demand this year?

Already, mine operators have scaled back production plans for 2009, namely coking coal used for steelmill blast furnaces as manufacturing grounds to a halt. …. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Investorschronicle.co.uk: Large cap mining kicked off 2009 in explosive fashion, with the main market-listed sector up almost 20 per cent since the new year. Underlying this is a strong rally in base metals through the same period, which has seen copper prices gain 15 per cent, zinc gain 13 per cent and nickel shoot up 23 per cent.

Analysts warn, however, that this current strength is a flash in the pan, attributing it to the annual re-weighting of the benchmark Dow Jones-AIG (DJ-AIG) commodity indices in the US….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Mineweb.com: With the credit crisis and a weak economy, Standard & Poor’s says U.S. metals demand has dropped sharply, with visibility into prospects for 2009 low, and in some cases non-existent.

A worsening of already dismal mine operations conditions and an extended slowdown could weaken credit metrics and cash flows throughout the U.S. metals and mining industry, Standard & Poor’s analysts have warned….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From FT Adviser: The commodity sector could face supply shortages when demand picks up again as companies make hard decisions against a backdrop of low demand and falling prices in 2009, according to fund manager Richard Davis.

Davis, who manages the BlackRock Commodities Income investment trust, said companies were being forced to cut back on spending, which could cause shortages further down the line….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From FT Alphaville: Goldman Sachs energy analysts Arjun Murti on the equities side and Jeff Currie on commodities have just presented their thoughts for the market in 2009 — a follow up to their outlook published earlier last month.

The conclusion? As stated before here, they see the market bottoming just as soon as non-Opec production begins to be reined in and the glut of supply on the front end begins to expire. According to today’s conference call they see this starting to happen around the second quarter, with a return to a bull market coming through in Q3 and Q4….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Bloomberg: China’s exports probably fell the most in a decade in December amid a deepening global recession, making it more likely extra measures will be implemented to stimulate growth.

Shipments from the world’s fourth-largest economy dropped 5.3 percent from a year earlier after tumbling 2.2 percent in November, according to the median forecast of 16 economists surveyed by Bloomberg News. The customs bureau may release the figures as early as today….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Bloomberg: Corn and soybean farms in Brazil will produce less this year than previously forecast as a southern drought stresses crops, the Agriculture Ministry said.

Corn growers will harvest 52.3 million metric tons in the South American country, the third-biggest exporter of the grain, down from a Dec. 8 forecast of 54.4 million tons, the ministry said today in a report….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From FT: Cocoa prices traded close to a 23-year high on Thursday amid concerns about dwindling supplies from Ivory Coast, by far the world’s largest producer.

Euronext-Liffe cocoa for delivery in May, the market benchmark, hit £1,809 a tonne before easing back to £1,794, up 2.4 per cent on the day. In late December, cocoa hit $1,820 a tonne, the highest since October 1985….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Proactiveinvestors.co.uk: China announced it is building up strategic reserves of copper, chromium, manganese, tungsten, rare earth metals, as well as oil and certain types of coal. The announcement came as oil prices slipped further down.

Inner Mongolia Baotou Steel Rare Earths, China’s largest rare earths processor, dropped 0.96 percent to RMB 8.22….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Livemint.com: India will be among the harder-hit regions; half of the world’s population could face serious food shortages. Global warming could seriously dent crop yields in the tropics and subtropics, including India by the end of the century, and if the agriculture systems don’t adapt, at least half of the world’s population could face serious food shortages.

Using data from 23 climate models, which contributed to the Intergovernmental Panel on Climate Change, or IPCC, 2007 report, David S. Battisti, University of Washington, and Rosamond L. Naylor of Stanford University’s Program on Food Security and the Environment say India will be among the harder-hit regions due to its high growing-season heat and decrease in soil moisture….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Chinacsr.com: A special commodity, carbon dioxide, has been licensed for trading on the China Beijing Environment Exchange. A reduction of 8,895 tons of carbon dioxide emissions is said to be the result of 81,670 Beijing citizens driving less from July 20, 2008, to September 20, 2008, during the Olympic Games. It is the first publicly listed ecological compensation item for Beijing.

At present, there is no base price for the trading item, but it is expected that it will be sold for USD44,475….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From AP: A liberal Massachusetts Democrat will take over a House subcommittee that will play a major role in drafting legislation on global warming and other environmental issues.

Rep. Edward Markey, known for his tough stances on environmental issues, will replace Rep. Rick Boucher, a Virginia Democrat who has been friendly to the coal industry. Boucher had chaired the panel eight years….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Fool: Investing fads run in cycles. Before the late 1990s, relatively few people had their own brokerage accounts; the mutual fund was the investment of choice for the investing masses and was sufficient to meet most of their needs.

As the Internet bubble inflated, suddenly everyone was talking about the prospects of their favorite brand-new tech stock, and technology centers like Silicon Valley, Seattle, and Austin found themselves awash in cheap money….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Mineweb.com: Listed silver stocks have quietly moved into the position of top-performing global resources subsector, leaving gold, uranium and copper names behind for now.

Temporary it may or may not be, but listed silver stocks have pulled a fast one on their gold peers, and currently represent the best-performing global resources subsector. The two metals share the “precious” classification, but vary vastly in two significant ways….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Commodityonline.com: “Behold the madness which the hedge funds and index funds have wrought!” That is really all one needs to know to explain today’s price action across the entire gamut of commodities, gold included.

I warned yesterday that the dipsticks that run these pestilential institutions will spin on a dime and do the exact opposite of what they did the day before whenever their little black boxes tell them to….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Mineweb.net: Analysts at Royal Bank of Canada on Thursday published a list of “best ideas” for global mining portfolios, for the first quarter of 2009, an exercise where 20 stocks are named.

The new portfolio is heavily dominated by gold stocks, with no less than nine of the total 20 names: AngloGold Ashanti, Barrick, DRDGold, Goldcorp, Iamgold, Kinross, Newcrest, Randgold Resources, and Red Back. One silver name is also mentioned, in the form of Pan American Silver….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Moneyweek.com: It’s the euro’s tenth birthday. And in many ways, it has proved the sceptics wrong and gone from strength to strength. But that’s no reason for Britain to join.

Last Friday saw the euro’s tenth birthday. Its creation in 1999, replacing the individual currencies of 11 European Union countries with a single medium of exchange, was a momentous achievement by the European Central Bank, which had been set up just seven months earlier….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Mondovisione.com: European Commodity Clearing AG (ECC) has prolonged the existing contract regarding the use of clearing systems with Deutsche Börse Systems AG before its expiry.

This contract safeguards the provision and operation of the Eurex system for clearing of exchange and over-the-counter derivatives transactions of EEX trading participants with a term until 2015….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Easybourse.com: Opaque over-the-counter markets and flawed pricing schemes are at the crux of the financial crisis, according to the chief executive of Nasdaq OMX Group Inc..

Central counterparty clearing - an area where Nasdaq has ambitious plans to expand in 2009 - is one way to boost transparency and mutualize risk in OTC markets, said Bob Greifeld, CEO of the exchange said in a speech Thursday before the National Press Club….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Reuters: The chief executive of Nasdaq OMX pushed for a merger of U.S. securities and futures regulators, saying it was incomprehensible that they both monitored the same products.

“Two different agencies with two very different approaches essentially monitor the same securities,” Nasdaq CEO Robert Greifeld said at a National Press Club event in Washington….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Asiarisk.com.hk: India’s second largest commodity exchange, the National Commodity and Derivatives Exchange (NCDEX), added gold and silver futures contracts to its portfolio at the end of December 2008.

According to the exchange, the contracts were launched in response to persistent market demand….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Fundstrategy.co.uk: Lyxor Asset Management saw assets under management (AUM) nearly double on its FTSE 100 exchange-traded fund (ETF) in December, a sign of investors’ renewed interest in UK equities, says the group.

AUM increased by 84% from just under £80m to £147m by the end of December. Net new creations stood at £80m for the month, the highest figure for any ETF in the Lyxor global range….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Reuters: Norway’s oil production fell in 2008 from the previous year to 122.7 million standard cubic metres from 128.3 million in 2007, and is expected to fall further in 2009, the government’s oil and gas agency said.

“The oil production curve continues to decline; however, 2008 oil production was almost 4 percent higher than the Norwegian Petroleum Directorate’s forecast,” the directorate said in a statement….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Guardian: One of the most active North Sea oil exploration companies has been forced into administration just six months after the crude price hit record highs of $147 a barrel, in a development that could further undermine Britain’s energy security.

Administrators have been called in to try to rescue Oilexco North Sea and industry experts today warned that the collapse was likely to be the start of a trend, given the credit crunch and the recent slump in the value of crude to little over $40 a barrel….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From BBC: US retailers saw disappointing sales in December’s key Christmas trading period and have lowered their earnings forecasts as consumers cut spending.

Discount giant Wal-Mart saw sales miss forecasts, rising 1.7% year-on-year against predictions of 2.8% growth….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Guardian: Oil prices fell 2.2 percent on Thursday as deepening economic gloom and soaring crude inventories in the United States eclipsed geopolitical tensions that have put world supplies at risk.

The decline followed Wednesday’s 12 percent drop, which marked the biggest daily percentage decline in the price of crude oil in more than seven years….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Bloomberg: Platinum gained for a sixth day on speculation that plans to bolster the U.S. economy will support metal demand. Gold was little changed.

Platinum, used in vehicle pollution-control devices, jumped yesterday above $1,000 an ounce for the first time in 12 weeks. U.S. President-elect Barack Obama has proposed a $775 billion stimulus. The Treasury has pledged $13.4 billion to help General Motors Corp. pay bills and $6 billion for lender GMAC LLC….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Theglobeandmail.com: Nickel led base metals prices lower on Thursday, shedding nearly 10 per cent, while copper fell for the second straight day as economic fears intensified and traders took profits as the rebalancing of commodity indexes started.

Buying ahead of the reweighting of the Dow Jones AIG Index and S&P GSCI this week turned to selling as the S&P rejig started and the market shifted its focus back to the weak economy….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From Fxstreet.com: Copper futures fell markedly for the second day in a row on a bearish economic outlook, underscoring that the metal’s recent short-covering rally amid commodities index reweighting is over.

March copper fell 3.25 cents, or more than 2.1%, to settle at $1.4790 a pound on the Comex division of the New York Mercantile Exchange….. Full Article: Source

Posted on 09 January 2009 by VRS |  Email |Print

From AP: Gold prices pulled off a moderate advance Thursday, but other commodities slumped for a second straight day as a profit warning from Wal-Mart Stores Inc. amplified investors’ concerns about waning demand for products of all kinds.

The nation’s largest retailer slashed its projection for fiscal fourth-quarter earnings and said December sales at stores open for at least a year rose by a worse-than-expected 1.2 percent. The announcement, which came as a stream of retailers reported weak December sales, proved that even discounters are suffering amid the recession, and underscored just how much consumers have cut back their spending….. Full Article: Source

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