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Commodities Briefing 23.Jan 2009

Posted on 23 January 2009 by VRS |  Email |Print

From Commodityonline.com: Ace commodities investor and global investment guru Jim Rogers says he hates British pound and is putting all future hope and investments only on China. “The charm of United Kingdom is all over and it would be prudent if you sell all their currency (pound sterling) fast,” Rogers says.

But Rogers, a vocal critic of America and Britain, who left the United States to settle down Singapore, said that he has great hopes on China….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From FT Adviser.com: Baring Asset Management is forecasting a strong recovery in commodities as it launches a Global Agriculture fund. Despite a 50 per cent reduction in asset prices in the last two months Jonathan Blake, manager of the Baring Global Agriculture fund, said he anticipated strong demand from emerging economies and supply side constraints will continue to drive demand for commodities in the long-term.

Growth of emerging markets, such as China and India, meant the commodity cycle was still in its early stages, according to Mr Blake, and would ensure it would continue to run….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Cattlenetwork.com: Production cuts by commodity producers and governments’ monetary and fiscal stimulus measures are “sowing the seeds” for an inflationary environment that would favor commodities in coming years, Bob Greer of Pacific Investment Management Co. said Wednesday.

That time may be at least a year away, but once it arrives commodities will provide investors with a hedge against inflation in addition to portfolio diversification, said Greer, head of the U.S. investment company’s Real Return product division. The division invests in commodities, real estate and other assets with the aim of hedging against inflation….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Businessedge.ca: Dampened U.S. resource demands are making bad situation worse. Canadians have long ceased being primarily hewers of wood and drawers of water, but there is growing appreciation among economists that resources remain the driving force behind both the current economic slump and prospects for a recovery.

TD Bank’s Don Drummond, one of the country’s leading private-sector economists, says he has little doubt that Canada is undergoing a commodity-price recession….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Guardian: China’s energy and metals demand slid again last month as its economy worsened, according to official figures released on Thursday that also showed a few opportunists making the most of hard times.

Chief among the opportunists may be China’s government, which has been taking advantage of cheap prices to stock up on everything from crude oil to soybeans, causing some blips in data that pointed to a continued slowdown in the economy….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Vietnamnet.vn: The economic growth slowdown and the Government’s announced demand stimulus package have both raised concerns that China-made cheap commodities will avail the opportunity to flock into Vietnam.

However, according to Vi Cong Tuong, Deputy Head of the Lang Son province Customs Agency, who has spent many years keeping close watch over Vietnam-China cross-border trade, this is not a concern at all….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From FT: Oil prices retreated on Thursday after US inventories of crude oil and products surged four times more than expected, signalling that supply is still outstripping demand amid the global slowdown.

West Texas Intermediate and Brent erased early gains following the release of the latest weekly US data, which showed crude stocks climbed by 6.1m barrels last week to 332.7m barrels, far exceeding the consensus forecast for a rise of 1.4m….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Hardassetsinvestor.com: Over a third of world GDP is vulnerable to weather risk, according to the Weather Risk Management Association (WRMA). Everyone knows how unpredictable it is, and if you’re a farmer or even an oil refiner, it can have a big impact on your bottom line.

Weather hedging started with energy companies. After the 1996 electric company deregulation, the industry started trading in an open market, and we began to see things like electricity swaps and futures….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Livemint.com: The World Bank and other development banks will support the flagging carbon markets to prevent a slump in greenhouse-gas reduction projects and protect the climate, according to a former senior executive at the World Bank.

The bank can’t afford to see a precipice, a gap, in development of emissions-cutting projects such as wind farms in developing nations, Ian Johnson, formerly the World Bank’s vice- president of sustainable development, said on Wednesday at a seminar in London. The international financial institutions will be there….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Livemint.com: India’s gold futures extended losses on Thursday on overseas leads and further pressured by a firmer rupee, analysts said.

Overseas gold dropped slightly tracking a falling euro, but strong investment demand was likely to support prices, with ETF holdings hitting another record as fears about a worsening global recession lingered….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Theglobeandmail.com: Gold prices turned 1 per cent higher Thursday as jittery investors soaked up physical bullion and pushed prices higher despite a stronger U.S. dollar.

“Gold’s strength seems to be based on worries over the banking sector, which has set the market onto an upward path,” said Tom Pawlicki, a precious metals and energy analyst of MF Global….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Commodityonline.com: A report from India’s National Commodity and Derivatives Exchange (NCDEX) says though Silver is currently plagued with the problem of supply surplus and falling prices, Silver ETFs will do well in 2009.

“Silver as we have been saying all along rallies well and outshines Gold during bullish phases but hits worse when the bears rule, losing all that it gained and much more. But Silver ETFs will shine in 2009,” said NCDEX economist Manasee S. Gokhale….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Zawya.com: World steel output fell by nearly a quarter in December, a report showed Thursday, as the global economic crisis reduced demand for the metal, particularly in the construction and car industries.

The World Steel Association, an industry body representing 86 percent of world steel makers, said production in December was down 24.3 percent compared with the same month a year earier….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Theglobeandmail.com: Copper fell to a three-week low Thursday and aluminum prices sank to their lowest levels since April, 2003, as weak economic data from China and the United Stated signalled further demand erosion going ahead.

Sluggish copper prices dragged zinc as much as 5.1 per cent lower and tin fell 3 per cent….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Guardian: An abundance of aluminium on the global market is fast becoming more visible and could hit prices further unless producers move to wipe out the growing surplus.

Global recession, collapsing consumer and corporate confidence, and plunging demand for industrial metals have already this week seen benchmark aluminium prices slide to $1,330 a tonne, the lowest since April 2003….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Bloomberg: Platinum fell, heading for a second weekly decline, on concern about waning demand as the global recession deepens.

General Motors Corp.’s 2008 sales dropped 11 percent, and Toyota Motor Corp.’s declined 4 percent as the economic slowdown curbed sales. Most platinum and palladium consumption is for catalytic converters to filter gasses in engines….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Resourceinvestor.com: Analyst calls for $8 cobalt - Supply Destruction in Congo Continues. Market tops and market bottoms are often made by egregious analyst calls. Remember when Goldman Sachs said oil was going to $200 last year? That was the top.

Well, that has me thinking that BMO Nesbitt Burns in Canada may have set the bottom for cobalt, calling for a long-term price of $8 per pound in a January 2009 review….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Resourceinvestor.com: Potash One Inc and Potash North Resource Corporation have entered into a binding letter of intent containing the principal terms by which, subject to satisfaction of certain conditions, Potash One will acquire all of the issued and outstanding common shares of Potash North through a Plan of Arrangement or other form of business combination.

The LOI contemplates that each Potash North shareholder will receive 0.3125 common shares of Potash One for each common share of Potash North….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Businessweek.com: It wasn’t what leaders in Tokyo or Beijing wanted to hear, but Treasury Secretary-designate Timothy Geithner has wasted no time making it clear that the Obama Administration will oppose any moves by Japan or China to weaken their currencies.

While Japanese exporters like Sony (SNE), Nissan (NSANY), and Toyota (TM) all expected to post operating losses as the yen soars to near-record highs against the dollar, Geithner told the Senate Finance Committee at his Jan. 21 confirmation hearing that the Obama Administration will frown on attempts by Japan to weaken its currency….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Bloomberg: Canada’s dollar weakened against its U.S. counterpart as concern that a worldwide economic recession may deepen crimped commodity-linked currencies.

“There are views of a more prolonged recession and lower global growth, and I don’t think that’s going to be particularly positive for commodity currencies,” said Chris Turner, London- based head of foreign-exchange strategy at ING Groep NV. “Any sort of recovery in commodity currencies will be quite shallow and quite short-lived.” …. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Bloomberg: The yen rose toward a record high against the British pound and traded near the strongest level since 1995 versus the dollar as concern the global slowdown will worsen spurred investors to take refuge in Japan’s currency.

Sterling fell toward a 23-year low versus the dollar and declined to near the weakest in two weeks against the euro before a U.K. report that may show Britain’s economy shrank in the fourth quarter by the most since 1990….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Bloomberg: Apollo Management LP, the private- equity firm led by Leon Black, plans to raise about $500 million for a hedge fund trading copper, gold and mining stocks.

The fund may later be expanded to as much as $2 billion, according to a presentation to investors obtained by Bloomberg News. An outside spokesman for New York-based Apollo declined to comment today. The fund is managed by Mark Thompson, former chief investment officer at London-based Galena Asset Management Ltd., the fund unit of commodities trader Trafigura Beheer BV….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Marketsmediaonline.com: Financial Technologies (India) Ltd. on Thursday announced the launch of the Bahrain Financial Exchange, as the smallest of six Gulf Arab economies strives to become the region’s financial hub for local and international investors.

The BFX, which is regulated by the Central Bank of Bahrain (CBB), has won approval to list cash and derivatives instruments on multiple asset classes including currencies, commodities, equity and debt-related products. It will also list and trade Islamic finance instruments or Sharia compliant products….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Business-standard.com: The commodity market regulator Forward Markets Commission today said it has already set up a committee to probe the alleged irregularities in the demutualisation of the Indore-based regional commodity bourse NBOT.

“A fact-finding committee has been set up to assess the complaint filed by the Indore-based Soyabean Processors Association of India (SOPA) against the National Board of Trade (NBOT) over alleged irregularities in the demutualisation process,” FMC chairman B C Khatua said….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Guardian: Corn supplies in the United States, the world’s largest corn grower and exporter, are expanding as the global economy contracts, capping corn prices and possibly driving those prices lower later this year.

“If you look at the demand and supply perspective, corn doesn’t have much going for it right now,” said Gavin Maguire, analyst for EHedger….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Thegrocer.co.uk: Food processors may not benefit from the falling price of agricultural commodities in 2009, according to a report by analysts at Rabobank.

The Dutch lender’s report suggests the dip in prices came too early to help suppliers recover their margins, as it pre-empted price negotiations with retailers for the year ahead….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Proactiveinvestors.co.uk: Whilst it is inevitable that the flow of negative economic and corporate news that underpinned the volatility will continue this year, we believe that much of this bad news has already been factored into share price of mining giant BHP Billiton.

As many get distracted by the short term noise, we are always looking at the bigger picture….. Full Article: Source

Posted on 23 January 2009 by VRS |  Email |Print

From Reuters: Gold edged down on Friday after rising in New York, but sentiment was supported by investment demand, with holdings on the ETF hitting another record on safe-haven buying driven by chaos in the banking sector.

The world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust GLD, said it held arecord of 819.11 tonnes of gold as of Jan. 22, up 13.15 tonnesfrom 805.96 tonnes on Jan. 21. …. Full Article: Source

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