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Commodities Briefing 27.Jan 2009

Nations turn to barter deals to secure food
Exchange-traded commodities boom
Commods assets dip on "price falls, not outflows"
Commodity investors should go for metals & energy
Gold advances to highest in three months on demand for haven
Gold continues to uncouple, positively
Gold, treasuries and USD
Short View: Gold glistens once more
Silver to fare better than rivals as investors buy
Platinum's 2009 market balance splits analysts
What’s ailing copper?
Copper falls from eight-week high on weakening demand outlook
Reuters precious metals poll 2009
Oil falls despite Opec output cut
UAE: Go-ahead for $3.5bn oil projects
Iraq to raise oil exports, boost refining in '09
International Renewable Energy Agency launched
Australia urged to take greater role in renewable energy
Kenya to change environment policy on carbon trading
Carbon emissions Britain set to lead the way?
Brazil: Carbon finance - The implications for both Brazilian and US Investors
Jim Rogers says pound may approach dollar parity
U.S. Dollar stalling as commodities bull market returns
Pound plunge may push U.K.’s Brown off currency fence
12 commodity based short ETFs
How oil ETFs are stacking up year to date
ETF's fortunes rest on commodities recovery
As gold heats up, key ETF cools down
Stars are lining up for merging SEC and CFTC
FMC awaiting FCRA bill approval to strengthen regional bourses
CME Globex ag futures trade resumes after 2-hr halt
Canada's Scotiabank to launch Gold trading in India
Argentine president declares farm emergency
Speculation mounts over India’s need for sugar rush
Food prices are set to rise again: Chatham House report

Posted on 27 January 2009 by VRS |  Email |Print

From FT: Countries struggling to secure credit have resorted to barter and secretive government-to-government deals to buy food, with some contracts worth hundreds of millions of dollars.

In a striking example of how the global financial crisis and high food prices have strained the finances of poor and middle-income nations, countries including Russia, Malaysia, Vietnam and Morocco say they have signed or are discussing inter-government and barter deals to import commodities from rice to vegetable oil….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Guardian: Exchange-traded commodities (ETCs) — securities that rise and fall with oil, gold, and other products — are booming as a way of investing in volatile raw materials, the head of ETF Securities Ltd said on Monday.

Hector McNeil, managing partner of the unlisted company which manages popular exchange-traded funds (ETFs) such as Physical Gold and Brent 1-Month, said the value of assets quadrupled in 2008 and looked set to increase by as much as 80 percent again this year….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Reuters: Assets under management (AUM) in commodities fell 22 percent in 2008 but the plunge was due more to the slump in oil, metals and grain prices than outflow of funds, Barclays Capital said on Monday.

Commodity investment products saw an estimated inflow of $15 billion last year, up 4 percent from 2007, BarCap said. The London-based investment bank said the AUM for commodities at the close of 2008 was $154 billion, down from a high of $270 billion in the second quarter….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Commodityonline.com: The year 2009 could be a good entry point for investors in core commodities in the energy, industrial metal sectors according to Andrew Karsh, Co-Lead Portfolio Manager for the Credit Suisse Total Commodity Return Strategy.

This is because market expects production cuts in a number of key commodities resulting in sumply, demand imbalances….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Bloomberg: Gold rose to a three-month high in London as investors increased holdings of the metal as a haven on concern the global recession will deepen.

Bullion exceeded $900 an ounce on Jan. 23 for the first time since October and gold holdings in exchange-traded funds surged to records. Economists expect a report tomorrow to show German business sentiment slumped, while U.K. home prices had the biggest annual decline since at least 2001….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Mineweb.com: Dollar gold bullion prices moved to three month highs, above USD 900 an ounce, in the past few days, and to all-time records in currencies such as the euro and Swiss franc, underpinning the ranking of listed gold stocks as the world’s best performing equities subsector.

At the same time, listed bank stocks, seen on a global basis, rank as the worst-performing subsector, with, however, material discrepancies between country bank performances. …. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Resourceinvestor.com: Gold is comfortably holding above the $900 level as the unusual decoupling with the euro (and unusual coupling with USD) continues due to the metal’s improved luster resulting from widespread global economic gloom and ultra low global interest rates.

As the price of money (interest rates) is held down by central banks, the price of its competitor (gold) pushes higher on the lack of yield reward in monetary alternatives, excess printing by Fed, Bank of England (BoE) and European Central Bank (ECB) as well as the absence of financial market shocks, which have proven negative for risk appetite as well as gold. …. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From FT: Gold is glistening once more, even though the dollar is rising. For the past two years, gold was an almost perfect inverse of the dollar, gaining whenever the US currency weakened.

This made sense, as gold is traditionally seen as a store of value. Investors would hedge against a falling dollar by buying more gold. But this meant that gold fell in the latter half of last year, in tandem with the rising dollar, despite the kind of extreme uncertainty that would normally prompt people to buy gold….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Guardian: Industrial precious metal silver’s appeal as a refuge for investors worried about financial instability will help it perform better than its rivals platinum and palladium, a Reuters survey showed.

The survey of 56 precious metals analysts and traders was carried out over the last three weeks. It showed spot silver would average $11.50 this year, down 23 percent from an average $14.94 in 2008….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Guardian: Analysts are divided on the outlook for the platinum market balance for 2009 amid uncertainty surrounding the prospects for mine supply and demand from automakers, a Reuters survey showed.

Only a handful — 10 out of 56 in a survey carried out over the last few weeks — were prepared to provide forecasts for 2009. Forecasts ranged from a surplus of more than half a million ounces to a deficit of 140,000 ounces this year….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Hardassetsinvestor.com: Supply and demand statistics for copper were release January 20 by the International Copper Study Group - of course, like many statistical reports, there is some lag time and data is a bit delayed.

This latest release contains information through October 30, 2008. These “latest” statistics put some definite numbers to what everyone has already known – demand for copper in key markets has dropped….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Bloomberg: Copper dropped from an eight-week high in London on speculation demand from builders and automakers is declining faster than refiners can trim output.

The metal used in plumbing and electrical wiring jumped the most since October yesterday after a report showed U.S. home resales unexpectedly rose for the first time in three months. Freeport-McMoRan Copper & Gold Inc., the world’s largest publicly traded copper producer, yesterday cut its 2009 sales estimate for the metal by a further 9 percent to 3.9 billion pounds….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Safehaven.com: Reuters has released their Reuters Precious Metals Poll 2009 in which Gold and Silver Investments Limited has taken part. The survey of 56 precious metals analysts, traders and banks was carried out over the last three weeks.

The Reuters poll finds that “gold prices are expected to hold firm this year as investors, looking for safety away from the mayhem in financial markets, pile into the precious metal used as a store of value.”…. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From BBC: Oil prices have fallen by more than $1 a barrel on continued forecasts of a deepening global economic downturn. US light crude for March delivery fell $1.22 to $45.25 a barrel, before recovering slightly to $45.52. London Brent crude slipped $1.00 to $47.37.

Oil prices rose by 14% towards the end of last week on evidence that Opec oil producers were reducing output….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Thenational.ae: The Abu Dhabi National Oil Company (ADNOC) has awarded contracts worth US$3.5 billion (Dh12.85bn) for the expansion of three onshore fields.

The contracts to increase production at the Sahil, Asab and Shah (SAS) fields show that ADNOC is moving ahead with its long-term plans to lift capacity by 30 per cent, to 3.5 million barrels per day (bpd), despite a recent dip in global oil demand….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Reuters: Iraq will restore oil exports to 2.0 million barrels per day in 2009 and increase its refining capacity to become self sufficient in oil products by the end of the year, Oil Minister Hussain al-Sahristani said on Monday.

“We have pledged in the 2009 budget to raise daily crude production and export an average of 2 million barrels per day, which means a 150,000 bpd increase compared to 2008,” Shahristani said….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Fairhome.co.uk: A new organisation promoting the use and development of renewable energy launched today in Bonn, Germany. The International Renewable Energy Agency (IRENA) will give advice to industrialised and developing nations on reducing fossil fuel dependency.

Fifty-five governments have committed to full IRENA membership, whilst a total of 116 countries will take part in the agency….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From ABC: Australia is being urged to take a more active role in a new international renewable energy agency, IRENA, that’s meeting for the first time today.

Chairman of the International Renewable Energy Alliance, Peter Rae, says the Australian Government only has observer status at this week’s IRENA founding conference in Bonn….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Reuters: Kenya plans to review its environmental strategy to allow companies to trade carbon credits, its environment secretary said on Monday.

Such schemes have been around for a number of years in other parts of the world, but the east African nation’s current environmental strategy from 1999 does not take into account the challenges posed by climate change….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Mhwmagazine.co.uk: An up-beat picture of a cleaner and greener Britain in 20 years’ time, with the rest of the world acknowledging the UK’s championing role in carbon reduction initiatives, is being painted by field-leading consultants and software developers Barloworld Optimus.

According to the Solihull-based company, the next two decades will be marked with carbon reduction measures gaining in momentum, notably-diminished reliance on fossil fuels, switches in production processes, and far-reaching changes in transportation patterns and policies….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Mondaq.com: The introduction of a federal cap-and-trade system in the US would bring significant changes to carbon markets globally. Not only the market would increase, but also the underlying emissions reduction projects would have a more diversified basis.

This will be possible if the Lieberman-Warner Climate Security Act of 2008, as proposed by a bill introduced in the US Senate by Senator Barbara Boxer on May 20,2008, is enacted….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Guardian: Jim Rogers, one of the world’s best known investors, said on Monday the pound could fall near parity with the dollar in coming years given Britain’s increasing debt and lack of economic growth drivers.

Rogers said last week the pound was “finished” and people should avoid investing in Britain, leading to a retort from Prime Minister Gordon Brown that economic policy would not be influenced by speculators….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Marketoracle.co.uk: Many investors that I have spoken to have moved away from the powerful but volatile commodities market after the cliff-dive drop that occurred in the second half of 2008. Other investors are waiting on the sidelines for the global economic expansion to develop which will bring inventory levels down and prices up.

Yet, the underpinnings for the next upward leg of natural resource prices is already in play and leading indicators are starting to break to the upside….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Bloomberg: Knowing the pound has tainted almost every British prime minister for four decades, Gordon Brown has so far avoided addressing sterling’s plunge to a 23-year low.

Mounting complaints at home and abroad may force him off the fence — with few good options as his poll numbers sink along with the British economy….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Seekingalpha.com: More and more inverse/short ETFs are being launched by issuers nowadays. I have posted an article already about reverse ETFs sorted in groups.

At US stock exchanges you can find mostly exchange traded funds underlying equities with 1:1, double or triple leverage….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Seekingalpha.com: How are Oil ETF’s performing year to date? The performance is actually quite different, with the leveraged DXO performing better than its peers. DBO is up 1.75% for the year, while OIL ETF is down 7.7%.

The most traded oil ETF, the USO tracking ETF is down 2.3% for the year. The difference is probably on how they have managed this supercontango in the crude oil futures. …. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Theglobeandmail.com: The exchange-traded fund, which trades like a stock but is put together like a mutual fund, mirrors the Dow Jones Canada select growth index.

Its components are chosen with a six-point screen made up of projected price-to-earnings ratio, projected earnings growth, price-to-book ratio, dividend yield, trailing price-earnings ratio and trailing earnings growth. The index is then weighted by float-adjusted market capitalization, to a maximum of 10 per cent for a single security….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Thestreet.com: As the price of gold breaks through $900 an ounce today, the SPDR Gold Shares ETF appears to have cooled a bit but is still seeing options action.

Options trading in the SPDR Gold fund was heaviest last week at the February 95 calls, as more than 35,000 went for up to $1.40. This morning, OptionMonster’s tracking systems showed those GLD calls traded as high as $1.90….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Easybourse.com: Treasury Secretary Henry Paulson’s announcement of a plan in March to meld the Securities and Exchange Commission and the Commodity Futures Trading Commission, initially received tepid response.

Political scientists and other regulatory observers made the same comments that they had been making for decades as discussions about bringing the entities under one roof: It’s a no-go on Capitol Hill….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Hindu.com: Commodity market regulator FMC is awaiting the passage of FCRA amendment bill to strengthen and reform regional exchanges whose falling turnover has become a major cause of concern.

“We are looking forward for the amendment of the Forward Contract Regulation Act (FCRA) 2006. Once the bill is passed, we will have more powers to strengthen regional commodity exchanges,” Forward Markets Commission (FMC) Chairman B C Khatua said….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Reuters: Electronic trading of several futures contracts at the Chicago Mercantile Exchange, including live cattle and hogs, was halted for nearly two hours on Monday due to technical problems, but trade has since resumed.

Trading of live cattle and dry whey futures on the CME Group’s Globex platform at the world’s largest derivatives exchange in downtown Chicago came to a standstill at 9:09 a.m. CST (1509 GMT), within minutes after business opened for the week….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Commodityonline.com: The booming gold market in India that imports and consumes the largest quantity of the yellow metal in the world is attracting global players. Leading global banks are now lining up to trade gold in India.

Scotiabank, Canada’s second-largest bank, has chalked out major plans to launch trading and hedging in gold and other precious metals like diamonds, platinum and palladium in India….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Lcsun-news.com: Argentina’s president declared an agricultural emergency Monday in the nation’s breadbasket provinces, responding to a key demand by powerful farm organizations amid the worst drought in decades.

Cristina Fernandez told political and business leaders in a televised press conference that the decree will exempt thousands of farmers from paying various taxes for one year to help them confront what analysts estimate will be $5 billion in losses this year….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From FT: Any day now the sugar market will receive the answer to an eagerly awaited piece of news: is India, the world’s largest consumer, going to have to tap the import market this year to compensate for a large drop in domestic production?

If New Delhi gives the green light to overseas purchases, prices are likely to rally, traders say….. Full Article: Source

Posted on 27 January 2009 by VRS |  Email |Print

From Commodities-now.com: The Feeding of the Nine Billion: Recent falls in food prices are no more than a temporary reprieve and are set to resume their upward trend once the world emerges from the current economic downturn.

This is one of the conclusions of a new Chatham House report, The Feeding of the Nine Billion: Global Food Security for the 21st Century, which urges policy-makers to start planning now for a future ‘food crunch’. …. Full Article: Source

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