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Commodities Briefing 28.Jan 2009

OPEC calls for curbing speculators, blames hedge funds for rout
Commods swing wildy on inflation/deflation debate
Commodities plunge as recession curbs demand for raw materials
Hint of growth in demand for raw materials
Relax: There will be no depression - gold and silver will outperform
Energy spreads offer leveraged profits, reduced risk
Why investors are rushing to Commodities
Nations pledge Euro 5.5bln to alleviate hunger
Britain demands global response as world's hungry to hit 1 bln
Investing in agricultural commodities
New index combines Jim Rogers’ top two profit plays: Commodities and China
Commodity assets under management fell to $154 bln in '08
US windpower soared in '08 but slowed late in year
Companies clean up - in the wrong way
EU carbon trading up 83%, analyst says
Cash and tax breaks for the carbon agenda
Obama's new emissions standards good energy and defense policy, little climate impact
Steel makers forecast grim first quarter
Copper leads base metals lower on recession, demand fears
Gold’s finest hour is coming
Silver stock joins big gold companies raising capital despite tough market
Sterling rallies against major world currencies
Australian, New Zealand dollars slip on rate cut expectations
Investec extends currency fund range
Yen trades near 1-week low on prospect U.S. to make ‘bad bank’
Australian dollar eases on inflation data
Loonie's worst year may run into 2009
Philip Bowring: The global imbalance
Hot agriculture ETFs post record inflows
Would you own an ETN?
Power trading can be controlled by two regulators: FMC
CME Group and Johannesburg Stock Exchange to cooperate on corn futures contract
Reliance Money to form JV with CWT Commodities
Commodities: How do you know if the trend is "for real"?
Corn, soybeans fall as slumping global economy cuts demand
Oil bounces above $42 after plunge on demand fears

Posted on 28 January 2009 by VRS |  Email |Print

From Bloomberg: OPEC wants U.S. regulators to curtail oil trading by hedge funds and speculators who helped make last year the most volatile in crude oil trading.

Abdalla el-Badri, secretary-general of the Organization of Petroleum Exporting Countries, is seeking rules to “limit the level of speculation” by investors who buy oil without planning to use it. Oil surged 46 percent in the first half of 2008 to a record $147.27 only to plunge by the end of the year, prompting OPEC to make its biggest ever supply cuts. …. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Guardian: Commodities investors are not sure whether to worry more about inflation or deflation, meaning the wild ride in oil, metals and grains prices is far from over.

Economic misery and unemployment have hammered prices for raw materials, sparking fears of deflation. But a new U.S. administration vowing to jump-start America’s stalled economy has fueled worries about inflation down the road….. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Bloomberg: Commodity prices tumbled the most in two weeks as the global recession eroded demand for energy, metals and grains. The Reuters/Jeffries CRB Index of 19 raw materials fell 3.7 percent, the most since Jan. 12.

Crude oil plummeted more than 9 percent, copper plunged the most in seven weeks, and corn declined 4.1 percent. Only cocoa and silver posted gains. …. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From FT: The cost of shipping dry bulk commodities such as iron ore, coal and grains yesterday rose to its highest level in three months, recovering 51 per cent from its December low, on signs of a tentative renewal in demand for raw materials.

The Baltic Dry Index, the market benchmark often seen as a leading indicator of commodities demand and global economic activity, climbed above 1,000 points for the first time since October, reaching 1,004 points in its sixth consecutive session of gains….. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Mineweb.com: LA-based gold commentator Kenneth J. Gerbino tells us why he feels there won’t be a depression but we will be faced with inflation, and markets in general, and bonds in particular, will prove to be bad buys, while gold and silver will perform best of all.

The financial pyramid was brought on by easy money. We are now faced with global investment losses and economic numbers that are at dangerous levels, and foretell a drastic future. …. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Hardassetsinvestor.com: The inherent volatility of the energy markets can make them very dangerous places for retail investors to trade, especially in transitional periods. The roiling crude and distillate marketplace can bounce thinly capitalized traders out rather rudely and rather quickly.

Spread trades can stretch an investor’s capital and minimize risk….. Full Article: Source

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From Commodityonline.com: 2008 was a memorable year for commodities globally and commodity futures in particular in India. A quick review of the year gone by shows that the demand slowdown is firmly in place and the prices of key commodities are significantly down compared to a year ago.

Several commodities including crude oil, gold, aluminum, copper, soyabean, pepper and a host of others touched their all-time highs only to slide swiftly to then unimaginably low levels….. Full Article: Source

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From FT: More than a dozen countries on Tuesday committed €5.5bn over the next five years as part of a fresh initiative to alleviate global hunger and help impoverished farmers boost production of agricultural commodities.

The commitments came after a United Nations conference on food security in Madrid, at which senior UN officials warned that the current combination of the financial crisis and high food prices would increase malnutrition levels. …. Full Article: Source

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From Xinhua: World leaders, major businesses and the United Nations were urged to sign-up to a new international agreement on Tuesday that will lift millions of people out of hunger and better prepare the world for future food crises.

Speaking at a world summit in Madrid, Spain, which ended on Tuesday, British International Development Minister Ivan Lewis setout a proposed pact that will for the first time establish a global response to food shortages that will double both food production in Africa and the growth of the agriculture sector in Asia. …. Full Article: Source

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From Istockanalyst.com: Investing icon Jim Rogers and Australia’s Macquarie Funds Group have teamed up to create an agricultural-commodities index that will help investors profit from shifting patterns of food consumption in the burgeoning market of Mainland China.

The Macquarie and Rogers China Agriculture Index is an investable index that will track price changes of the market “basket” of the agricultural commodities most commonly consumed in China. Macquarie Funds is the asset management arm of Australia’s Macquarie Group….. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Moneymorning.com: Investing icon Jim Rogers and Australia’s Macquarie Funds Group have teamed up to create an agricultural-commodities index that will help investors profit from shifting patterns of food consumption in the burgeoning market of Mainland China.

The Macquarie and Rogers China Agriculture Index is an investable index that will track price changes of the market “basket” of the agricultural commodities most commonly consumed in China. Macquarie Funds is the asset management arm of Australia’s Macquarie Group….. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Cattlenetwork.com: Assets under management in commodities last year fell 43% from a record $270 billion at the end of the second quarter to US$154 billion, with the massive downturn in prices accounting for most of this drop, Barclays Capital said in a note dated Monday.

For the year as a whole, commodity assets under management were down 22% on year, the bank said, again pointing out that this wasn’t due to widespread investment outflows, but price falls. …. Full Article: Source

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From Guardian: U.S. wind power capacity grew last year by its fastest rate yet, but development “slowed to a trickle” late in 2008 as the credit crunch hit renewable energy, an industry group said.

“Our numbers are both exciting and sobering,” said Denise Bode, chief executive of the American Wind Energy Association….. Full Article: Source

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From Guardian: Emissions trading, sometimes called cap and trade, tackles climate change by providing economic incentives to achieve reductions in carbon and other greenhouse gases.

The emissions trading scheme (ETS) is the world’s most advanced example of a market-based scheme under which a cap has been set on the amount of greenhouse gases which may be emitted….. Full Article: Source

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From Eponline.com: The global carbon market in 2008 grew faster both in terms of volume and value than estimated, dramatically bucking the current downturn that has depressed most global commodity trading, according to a report by Point Carbon, a provider of market intelligence and analysis.

Overall, 2008 saw 4.9 billion tonnes (gigatonnes or Gt) of carbon dioxide equivalent (CO2e) change hands, up 83 percent on 2007, a recent “Carbon Market Monitor” report says….. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Theglobeandmail.com: Canadian energy companies will get both direct assistance and tax breaks to develop carbon-capture-and-storage technology that promises to reduce greenhouse gas emissions from coal-fired power plants and oil sands projects.

In his budget Tuesday, Federal Finance Minister Jim Flaherty unveiled a $1-billion “green energy fund” that will support research and commercialization of clean-energy projects, including carbon capture and storage (CCS)….. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Examiner.com: Actions taken this week by President Obama on new fuel efficiency standards is good energy (and defense) policy, but has little to do with global warming.

President Obama Obama directed his Environmental Protection Agency to review a California application to regulate greenhouse gases and told his Department of Transportation to begin implementing fuel efficiency standards passed last year but not implemented by the Bush administration….. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From AP: Two steel makers forecast a grim first quarter Tuesday as the recession continues to slow demand for everything from washing machines to sport utility vehicles, suggesting that more plant shutdowns and job cuts could be on the way.

U.S. Steel and AK Steel said they expect operating losses in the first three months of 2009, while a third steel company, Nucor Corp., forecast “only marginally better” earnings compared with its fourth quarter. …. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Theaustralian.news.com.au: Copper led a decline across the base metals complex overnight as investors returned their focus to recession and slumping demand.

Copper, a key material in construction, had climbed around 10 per cent on Monday after data showed sales of previously owned US homes rebounded in December….. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Sovereignsociety.com: Over the last 12 months the world has witnessed the greatest market volatility since the 1930s. Banks in several industrialized countries, including the United States, are effectively bust, credit markets have frozen, unemployment has soared and real estate remains in a freefall.

Domestic consumption in the United States – vital to global export growth – has collapsed amid a consumer recession while individual balance sheets have been crushed by a deflation gripping real estate, stocks, non-Treasury debt, commodities, foreign currencies (except the yen) and even fine art. …. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Mineweb.com: Silver Wheaton, seen by a number of investors as the “No 1 silver proxy”, has announced a CAD 250m bought deal, at CAD 8 a share, joining a growing number of listed gold stocks successfully raising fresh capital, among them Alamos Gold, which has just announced a CAD 75m bought deal at CAD 8 a share.

The deals highlight the ranking of gold stocks as the world’s best-performing equities subsector; silver stocks rank in second place. …. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Financialadvice.co.uk: The UK currency was today centre stage on the currency exchange markets after a sharp rebound across the board.

While there are suggestions that the Barclays bank statement, indicating that maybe the banking sector is on the turn, has breathed new life into the UK currency many traders believe the news from the high street was far more telling….. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Bloomberg: The Australian and New Zealand dollars declined as commodities fell the most in two weeks and consumer prices in Australia posted the biggest drop in 11 years, clearing the way for further interest-rate cuts.

The currencies slid as Australia’s consumer price index fell 0.3 percent from the third quarter, when it gained 1.2 percent, the Bureau of Statistics said in Sydney today. The UBS Bloomberg Constant Maturity Commodity index of 26 products declined 3.5 percent. …. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From FT Adviser.com: The Luxembourg-based Investec GSF Managed Currency Fund (Sterling) has been renamed as the Investec GSF Currency Alpha Fund, with new US dollar and euro share classes added to sit alongside the existing sterling share class.

The fund is an absolute return, cash-plus product, and the fund managers have an internal target whereby they seek to provide a 2-3 per cent pa gross return over the relevant Libor benchmark. …. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Bloomberg: The yen traded near a one-week low against the dollar and the euro on speculation the U.S. will create an institution to remove toxic assets from banks’ balance sheets, reviving demand for higher-yielding assets.

The yen also fell versus Norway’s krone and Sweden’s krona. The Federal Deposit Insurance Corp. may manage the so-called bad bank that the Obama administration is likely to set up as it tries to break the back of the credit crisis, two people familiar with the matter said yesterday. …. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Theage.com.au: The Australian dollar was lower around noon as an easing in the inflation rate put some pressure on the currency. The dollar was trading at $US0.6631, down from Tuesday’s close of $US0.6654.

During the morning, the currency moved between $US0.6613 and $US0.6670….. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Calgaryherald.com: Canada’s currency may extend its biggest annual decline on record, as tumbling crude prices hobble foreign investment in the country’s oil patch, according to the world’s biggest strategists and economists.

The Canadian dollar fell 18% this year as a global recession cut demand for commodities, which generate half the country’s exports. Canada’s current-account surplus, the broadest measure of trade, will turn into deficit in 2009, said Toronto-based Scotia Capital Inc., a unit of Canada’s third-biggest bank….. Full Article: Source

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From IHT: The new U.S. secretary of the Treasury, Timothy Geithner, has sparked a potentially acrimonious debate by alleging at his confirmation hearings that China manipulates its currency. This may be politically necessary but it’s not helpful.

The currency debate has become sterile, obscuring a bigger and, for the global economy, more difficult issue: China’s huge current account surplus, which is no longer just a mirror of U.S. deficits….. Full Article: Source

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From Commodityonline.com: Exchange Traded Funds managed by ETF Securities Ltd are showing considerable inflows last week with agriculture inflows up $56 mn, the largest weekly inflow since April 2008, ETF Securities Ltd said.

Steady inflows into ETCs have been recorded every week for the past eleven weeks, going back to 7th November 2008. Of those past 11 weeks, $1,570m (£1,150m) has flowed into ETCs with gold and oil contributing 90%….. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Indexuniverse.com: The risk in holding an ETN, of course, is that some weekend we will wake up to learn that the underwriting bank has been nationalized and its senior debt holders wiped out. This seems extraordinarily unlikely for a bank as large as Barclays—especially for one that is profitable right now—but it is a question in this extraordinary environment.

Currently, a small minority of note holders are voting with their feet….. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Indiatimes.com: Ahead of the hearing of PXIL’s petition on electricity futures, the commodity market regulator, FMC, has said that the spot and
futures trading of electricity can be controlled by two different regulators.

“The spot market and forward markets in goods (including electricity) can be regulated by two different regulators,” Forward Markets Commission (FMC) Chairman B C Khatua said in a letter to the Central Electricity Regulatory Commission (CERC). …. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

CME Group has signed an agreement with the JSE Ltd to license CME Group’s benchmark corn futures settlement prices to create a new JSE cash-settled corn futures contract.

The contracts will be listed, traded and settled by the JSE’s Safex Agricultural Products Division alongside the current successful South African grain contracts. The 100 metric ton corn contract will see the May 09, July 09 and September 09 expiries introduced for trading on Wednesday 28 January 2009….. Full Press Release: Source

Posted on 28 January 2009 by VRS |  Email |Print

From : RTTNews: Reliance Money, a part of the Reliance ADA Group and a large shareholder in National Multi Commodity Exchange, is likely to widen its services by setting up a joint venture with CWT Commodities, a Singapore -based warehousing company to manage goods stored in warehouses.

The 50:50 new Indian JV firm, Reliance CWT Commodities would issue warehouse receipts that guarantee the quality and quantity of goods stored in its godowns apart from grading and sorting services….. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Elliottwave.com: First of all, it’s crucial to remember that a market forecasting method that can tell you with 100% certainty what “the real” trend is simply doesn’t exist. It’s a truism, but new traders often forget that.

Having said, Elliott wave analysis can be very helpful when you’re struggling with this question….. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Bloomberg: Corn and soybeans fell the most in two weeks as the slowing global economy erodes demand for U.S. crops used to make food, animal feed and biofuels.

U.S. consumer confidence sank to the lowest level on record in January as jobs evaporated and home values sank, signaling a further slide in spending, according to a report from the Conference Board. …. Full Article: Source

Posted on 28 January 2009 by VRS |  Email |Print

From Reuters: Oil rebounded above $42 a barrel on Wednesday from a 9-percent fall a day ago, as worries over demand due to the faltering global economy eased.

Traders will watch for weekly U.S. inventory data from the Energy Information Administration (EIA) due later in the day, after the American Petroleum Institute (API) reported a much smaller than expected crude stockbuild on Tuesday….. Full Article: Source

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