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Commodities Briefing 02.Mar 2009

Posted on 02 March 2009 by VRS |  Email |Print

From FT: Food commodity prices this year will remain above historical levels, hitting poor countries for the third year in a row, according to the US department of agriculture.

The forecast at the USDA’s annual conference in Washington points to lower prices than in the first half of last year, when the cost of commodities such as corn, wheat, soyabean and rice hit all-time highs….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Indiatimes.com: Commodity funds or mutual funds (MFs) that either invest directly in commodities or in those companies that have a commodity-centric business model have been around for a while now. It is worthwhile to see how such funds have performed and whether these can hold promise for investors, who are keen to tap the commodity market.

ET Intelligence Group conducted an analysis of the performance of MFs including commodity MFs and specia funds (ETFs) to understand as to which funds really stood the tough times and which can actually withstand the times to come….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Investmentnews.com: With the stock market down more than 16% in 2009, following a 38% drop last year, the idea of a non-correlated investment strategy has probably never sounded better. The folks at AlphaMetrix LLC in Chicago are hoping to tap into the growing appetite for non-correlated performance with a strategy that could be off-putting at first, even if the numbers do seem to add up.

The $2 billion managed futures and foreign-exchange platform, which provides access to more than 60 commodity trading advisers, in January launched an investible index that tracks the performance of a pool of short-term futures traders….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Indiatimes.com: While many question the status of the commodities as an investment class, an economic recovery is expected to give them an instant momentum. We asked two commodity experts to share their views on different commodities and how the investors should approach the commodity market in the current economic scenario.

There are no formulae to say that commodities have the same relationship with other asset classes . Gold prices in India may remain up for the next quarter, but a reversal in the rupee could stall the rise. The global economy has a long way to recover that can be seen from the consumer confidence….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Resourceinvestor.com: How does silver perform during a deflation? It’s a question many of our readers are asking. Today, most investors are fairly convinced that gold does fairly well during a deflationary environment.

Since gold has held better than all asset classes these past several months, many mistakenly believe that gold does best during inflations, but they are not sure about gold during deflations….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Bi-me.com: The trend in gold derivatives market is pointing towards further rise in prices of the yellow metal, Merrill Lynch said.

“Increasing inflation expectations, a rapid increase in credit risk, falling stock markets, and a wave of monetary and fiscal policies are all contributing to fuel a rally in gold prices,” the investment bank said in a report….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Commodityonline.com: In May 2008, when gold was around US$900, I thought it would go down to US$800 for several reasons I mentioned at that time. We went down to US$720 until autumn 2008. Now we are back at US$900 and will perhaps go up to US$1,000 or US$1,050 at the end of March.

Buying on dips like in autumn 2008 is the best strategy, in my opinion. Perhaps sometime later (in a few years, but not ‘09) gold will start to move US$50 or US$100 for some days in a row to US$2,500 or more….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Theaureport.com: Gold is now starting to establish new all-time highs in all those currencies. The masses will slowly realize that no paper currency is safe in the near future.

If you own gold you are completely independent from any government or any other institution in the world. You don’t owe anyone anything. Because of this advantage you get no interest….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Bullionvault.com: Chinese investors are rushing to Buy Gold to provide a safe haven from the crisis-ridden financial markets.

The yellow metal has largely outperformed other assets since the start of the economic downturn and prices have increased by around 40 per cent since last October….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Mineweb.com: The VM Group says $50bn less cash will be injected in the mining industry in 2009 than expected before the recession and the same amount could be cut from planned budgets in 2010.

It said in its recent Fortis Metals Monthly that this would impact future production efficiencies, reduce metal supply, lead to the neglect of “vital” maintenance work, delay late-stage development projects and push future metal supply out….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Theaustralian.news.com.au: Chinalco’s president is seeking a meeting with Wayne Swan today to sell its $US19.5 billion Rio Tinto grab.

In his first overseas engagement outside of China since his appointment as president, Xiong Weiping will meet with the foreign investment review board today and has also requested a briefing with Mr Swan….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Moscowtimes.ru: Russia’s metals billionaires have shelved plans to create a national mining giant around Norilsk Nickel after the Kremlin opposed a proposal to absorb their billion-dollar debts in exchange for a stake in the firm.

The decision, reached at a meeting between President Dmitry Medvedev and several metal industry leaders Thursday, will force metals company owners to restructure their own debts as the Kremlin preserves cash to fight a looming budget deficit….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From WSJ: A handful of miners are locking in metal prices by hedging their production, a sharp departure for an industry that had only recently sought as much exposure as possible to commodity prices.

Most miners abandoned forward sales of metals in recent years, and many worked to unwind hedge books. That was largely because of pressure from investors, who bought the shares, particularly those of precious metals companies, as a proxy for the underlying commodity….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Seekingalpha.com: As trading gets underway for March 2009, there are 843 exchange-traded products (756 ETFs, 87 ETNs) listed in the U.S. With so many choices there are bound to be many with severe liquidity issues.

A surprising number have days with zero volume and outrageous bid/ask spreads - ETFs on Deathwatch. However, there is a small group of ETFs that rise above the crowd - ETFs that trade more than $1 billion per day - members of the ETF $Billion Club….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Guardian: The dollar rose against most other currencies on Monday after sources said the U.S. government would pour a further $30 billion into embattled insurer American International Group, fuelling safety buying of the greenback.

The AIG move follows a new rescue plan for Citigroup, adding to fears that more financial firms may need similar rescue plans, analysts said….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Reuters: Weak currencies in central and eastern Europe should concern the European Union, Poland said on Sunday after an EU summit on the financial crisis.

Neither Poland’s Finance Minister Jacket Rostowski nor Prime Minister Donald Tusk, who both spoke at a briefing after the EU meeting, elaborated as to exactly why this may be the case….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Scoop.co.nz: Agricultural producers upskill to combat the global economic crisis. Assisting agricultural producers to manage their farm businesses through the challenges of the global economic crisis will be a key focus of this year’s Rabobank Executive Development Program (EDP), which opens for applications for its 2009 course intake today.

Program organisers are expecting strong demand in the EDP’s 10th year, as progressive New Zealand farmers and agribusiness managers move to invest in enhancing their business management skills in order to manage and even find opportunity in the challenging global conditions….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Business24-7.ae: Commodity markets had a good week with the CRB Commodity index bouncing six per cent from the important $200 (Dh734) level primarily on the back of a recovery in oil markets.

The general news from the global economy is still not pointing to any recovery with stock markets continuing to make new lows. It has been a particular bad week for US data and any hopes of seeing a near-term bottom in the housing market has proved premature….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Wiadomosci.onet.pl: Russia is drafting a new European Energy Charter Treaty that will take the interests of all energy suppliers into account, President Dmitry Medvedev has said.

Russia will possibly present these proposals at the G20 in London in early April, Medvedev said in an interview with the Spanish mass media ahead of his state visit to Madrid….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Seekingalpha.com: The Commodities Futures Trading Commission has confirmed with a variety of news sources that it has launched an investigation into the trading activity of the United States Oil Fund (USO).

Specifically, the CFTC is looking at USO’s trading activity on February 6, when it rolled its entire portfolio of oil futures contracts from the March contract to the April contact….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Reuters: U.S. oil fell below $44 a barrel on Monday, extending the previous session’s 1 percent decline, on worries the ailing U.S. economy would further dent global growth and damage energy consumption.

Comments from Iran, the second-biggest producer in the Organization of the Petroleum Exporting Countries, that the producer group was unlikely to cut production again at a meeting this month added further downward pressure on prices….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Xinhua: Iran’s Oil Minister Gholam-Hossein Nozari said that the Organization of Petroleum Exporting Countries(OPEC) would not cut its output in March, the satellite Press TV reported on Sunday.

“I do not think we move towards cutting production again. Instead, a mechanism should be defined to repair prices in the oil market,” Nozari was quoted as saying….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Chinadaily.com.cn: China is accelerating the build-up of its oil reserves to avoid the economic dislocations the country suffered in 2008 from fluctuations in the world oil price.

China’s National Energy Administration (NEA) recently released a plan to build nine large refining bases in coastal areas over the next three years, sources with the China Petroleum and Chemical Industry Association said last week….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Chinadaily.com.cn: China’s three major oil companies - PetroChina, Sinopec and CNOOC - can expect better revenues this year due to a rebound in domestic demand and relatively stable oil prices, according to experts.

“The top three oil companies’ profits will increase this year,” said Lin Boqiang, an energy professor at Xiamen University….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From AFP: Hopes of a biofuel bonanza for Southeast Asia, raised when sky-high oil prices made the search for alternative fuels a priority, have been shelved as global fortunes and crude prices nose-dive.

Back when movie stars won plaudits for driving hybrid cars, and grains and oils were going cheap, regional governments grew excited over producing biofuel to lower energy costs and soak up agricultural stockpiles….. Full Article: Source

Posted on 02 March 2009 by VRS |  Email |Print

From Commodities-now.com: Prices jumped today for some US carbon contracts, with traders more bullish on federal cap and trade. Trading activity was particularly high for carbon financial instruments (CFIs) on the Chicago Climate Futures Exchange (CCFE), market players observed.

Traders and brokers speculated that buyers are anticipating CFIs will be accepted as early action credits in a federal cap-and-trade scheme after the Obama administration revealed yesterday that it is factoring revenue from carbon allowance auctions in its fiscal year 2010 budget….. Full Article: Source

A SQUARE’s recent webinar on carbon-led investing - with voice-over (which non-A SQUARE subscribers can purchase individually) can be accessed here:
http://www.opalesque.com/asquare/509/Webinar_Carbon_Led_Investing.html

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