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Commodities Briefing 03.Mar 2009

Posted on 03 March 2009 by VRS |  Email |Print

From Bloomberg: Commodities plunged the most since October, led by energy and agricultural futures, on heightened concerns that the global economy may not recover this year and demand for raw materials will decline further.

The Reuters/Jefferies CRB Index of 19 raw commodities dropped 5.3 percent, the most since Oct. 10, closing at the lowest level since June 2002. The gauge is down 13 percent this year. Crude oil plunged 10 percent, heating oil fell 9.1 percent and sugar lost 7.1 percent. …. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Smh.com.au: Commodity exports from Australia, the worlds largest shipper of iron ore, coal and wool, are forecast to decline in fiscal 2010 for the first time in six years before rebounding the following year as the global economy recovers.

Sales may drop 17% to $162 billion in the 12 months ending June 30, 2010, the Australian Bureau of Agricultural and Resource Economics (ABARE) said today in a report….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Foodproductdesign.com: A new USDA report reveals world market prices for major food commodities such as grains and vegetable oils have risen sharply to historic highs of more than 60 percent above levels just two years ago.

According to the report, many factors contributed to the increase in food commodity prices including increased global demand for biofuels feedstocks and adverse weather conditions in 2006 and 2007 in some major grain and oil seed producing areas …. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Reuters: Despite a sharp dip in economic growth this year and next, Chinese investment in foreign companies should continue to surge as the country tries to lock in access to resources, a mining conference in Toronto was told on Monday.

Chinese foreign direct investment outside the financial sector hit $40.5 billion last year — up from a measly $700 million in 2001 — and should continue to climb for at least the next two years, Kobus van der Wath, managing director of business strategy firm Beijing Axis told the Prospectors and Developers conference….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Bloomberg: Liongate Capital Management LLP, a London-based firm managing $2.2 billion, plans to raise $500 million for a fund of commodity hedge funds.

The Liongate Commodities Fund returned about 0.1 percent last year and 0.3 percent in January, when it operated with the firm’s capital of $40 million, the company said in a statement and a presentation. …. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From IHT: Trading of the Middle East’s first Islamic-law compliant, gold-backed, security began Monday in one of Dubai’s two exchanges, marking a new push to further tap into the lucrative Sharia-compliant financial market that has better weathered the global economic meltdown than conventional equities markets.

The Dubai Multi Commodities Centre, one of two groups behind the securities’ launch, said in a statement that the Dubai Gold Securities represents the first exchange traded commodity on NASDAQ Dubai….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Mineweb.com: While the MSCI Barra dollar index for global equities has fallen 55% from its highs, seen in October 2007, and is busy scraping new lows, 20 selected gold stocks have risen by nearly 500%, on average, since lows seen four months ago.

This set of gold stocks is also some 55% below highs seen earlier in 2008, but investors with foresight, or luck, or both, who switched into these and many other gold names, would have scored heavily. …. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Marketoracle.co.uk: Commodities, normally a late-performing group, led the stock market by 12 months. Gold, the most sensitive to the movements of the dollar, reached a low seven months before the Commodity Research Bureau (CRB) Index and 19 months before the S&P 500.

Fundamental demand for natural resources was still extremely weak, but prices rose on the expectation of a lower greenback….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Bloomberg: Silver’s biggest discount to gold in 13 years has investors betting on the best annual return for silver since the Hunt brothers’ bid to corner the market in 1979.

Money managers are buying precious metals as a refuge from the 47 percent drop in the Standard & Poor’s 500 Index in the past year and growing concerns that Treasuries will fall as the U.S. government pledges $9.7 trillion to revive the economy….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Resourceinvestor.com: Every silver lining has a cloud, and sky-high gold prices are no exception. While on the upside, the investment fund interest has driven the price for one ounce of the yellow metal above US$900, the downside is that the price spike has put a damper on physical demand, notably imports of gold into India in 2008.

Many families in India tend to hold family wealth in gold assets, in the form of jewelry….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Bloomberg: Gold output in Australia, the world’s third-largest producer, will increase 17 percent during the next four years as investors boost purchases amid the global recession.

Output is forecast at 264 metric tons in the year ending June 30, 2012, the Canberra-based Australian Bureau of Agricultural and Resource Economics said today. Output this fiscal year may 225 tons, the bureau said. …. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Kciinvesting.com: It’s official: The Dow Jones Industrial Average posted its biggest February point drop on record. Meanwhile, the dollar is trading at three-month highs. Are these factors bullish or bearish for silver and gold?

The dollar is up this year simply because at this point in time it’s considered a safe haven. What about gold and silver?…. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Resourceinvestor.com: Hybrid cars are the fastest growth area within the rare earth market, says a leading expert on the exotic elements.

Lanthanum, used in the batteries which power hybrid electric-gas vehicles, is just one of the rare elements with booming high tech and industrial applications, Dudley Kingsnorth, of the Industrial Minerals Company of Australia, said….. Full Article: Source

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From Reuters: Spain and Russia are set to sign a broad agreement for energy cooperation, Spanish Prime Minister Jose Luis Rodriguez Zapatero said on Monday.

“Tomorrow our states will sign a broad agreement on energy cooperation … in developing, exploiting, transporting and selling energy resources, both renewables and traditional,” Zapatero said….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Rian.ru: Russia has invited Iran to sell crude oil on the St. Petersburg Commodity Exchange, the Russian energy minister said on Monday. “The Russian side has proposed that our Iranian partners consider the possibility of selling a part of Iran’s oil at the St. Petersburg Commodity Exchange,” Sergei Shmatko said.

Shmatko, who is the Russian co-chairman of a bilateral intergovernmental trade and economic commission, said the proposal was important in a situation where oil producing countries “are diversifying their trade infrastructure on the world oil market.” …. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Chinadaily.com.cn: The weekly average prices of the Organization of Petroleum Exporting Countries (OPEC) rebounded above $40 again to $40.01 per barrel last week, the Vienna-based oil cartel said on Monday.

The prices saw an overall upward tendency last week, with an increase of about 9.7 percent within the week, reaching a daily average price of $43.30 per barrel on Friday. The daily OPEC oil prices rose on four trading days of last week except Tuesday….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Forbes: The oil services sector fell on Monday as oil prices plunged on increasing doubts that energy demand will recover amid a battered economy and as rig counts continued to tumble.

Crude oil prices fell $4.26, or 9.5 percent, to $40.50 a barrel on the New York Mercantile Exchange….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Marketoracle.co.uk: John Maynard Keynes is one of the most influential and controversial economists in history. He warned of the huge burden war reparations placed on Germany and its allies after WW I. He played an integral role in establishing the post-WW II financial world.

His economic theories established the impetus for governments to spend like mad during downturns. He made, lost, and made back a massive fortune in the stock market. He counted Pablo Picasso and Virginia Wolf as friends….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From FT: Oil prices tumbled $4 a barrel yesterday, leading a broad retreat, amid fears the global economic recession was deepening.

Manufacturing activity remained mired in recession in the US, the UK and Europe, according to the February purchasing managers’ surveys, which underlined concerns about demand prospects for commodities….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Gulf-times.com: Reliance Industries, India’s largest listed firm, said it is to absorb its 70%-owned Reliance Petroleum unit through a share offer, creating the world’s largest refining complex.

Combining operations will cut costs, Reliance said in a statement, adding the move would boost earnings from year one — at a time when world crude oil prices have slumped 71% since hitting a record high last July. …. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Menareport.com: A recent study on the future of energy in Syria, prepared by Dr.Ziad Arbash , a researcher at the Orient Centre for Strategic Studies, has indicated that oil production in 2007 reached about 379.000 barrels per day, of which the total production of the Syrian Oil Company is estimated at 193.000 barrels per day.

The other companies operating in Syria are the Euphrates, Deir Al-Zour, Hayyan, Kawkab and Dublin and their production is estimated at about 186.000 barrels per day. …. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From FT: The US natural gas market is renowned for its volatility, with minor shifts in the balance of supply and demand producing big swings in prices. But the violence of recent price moves has still taken many investors by surprise.

The combination of plunging demand amid a deepening US recession and a rise in supply has pushed prices below $4 per million British thermal units, the lowest since late 2002. …. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Tvnz.co.nz: The Commerce Commission has released draft guidelines to help businesses understand their obligations for carbon offset and carbon neutrality claims under the Fair Trading Act.

As demand grows for environmentally friendly products and services, the commission says many businesses are using carbon reduction or offsetting to differentiate themselves from their competition….. 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

Posted on 03 March 2009 by VRS |  Email |Print

From Seekingalpha.com: The ETF Innovators Global Carbon Trading Index tracks the performance of 20 companies (summarized in accompanying table) from a starting value of 21,687 on 1/19/09 which are involved in a variety of green business activities.

The Global Carbon Trading Index has lost about 15% of its market value in the past five weeks to a level of 18,497. Initial enthusiasm for the space (with the election of President Obama) has faded given the realities of a global economic slowdown and bear market for stocks….. 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

Posted on 03 March 2009 by VRS |  Email |Print

From Oanda.com: When US President Barack Obama and Canadian Prime Minister Stephen Harper met in Ottawa last week, North Americans learned that a continent-wide cap-and-trade system for limiting greenhouse gas emissions was officially on the political agenda after years of speculation.

This was reinforced a few days later when President Obama addressed Congress and asked for “legislation that places a market-based cap on carbon pollution”….. 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

Posted on 03 March 2009 by VRS |  Email |Print

From AP: The dollar gained on the currencies of the other major economies Monday, gathering steam as the Dow Jones industrials sank below 7,000 and equities plunged abroad.

The dollar has tended to benefit on a “safe haven” bid as investors pull money from stocks and invest them in super-safe U.S. government debt….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Forbes: Emerging European currencies plunged on Monday, led by an almost 2.5 percent drop in the Hungarian forint, after a summit of European Union leaders rejected a mass bailout plan for the region.

Romania looked to be preparing to join a list of countries rescued by the International Monetary Fund after a source said Bucharest had started preliminary talks on a potential deal to help finance its vast trade deficit….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Nation.co.ke: The push for a single currency to facilitate trade and help fast-track the integration of African countries has begun. Top African economists and academics are attending a meeting in Nairobi whose theme is “Towards the creation of a single African currency”.

The three-day congress, which started on Monday, is expected to deliberate on possibilities of adopting the single currency. …. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Livemint.com: The Forward Markets Commission (FMC) must be given due credit for putting up its order related to National Commodity and Derivatives Exchange Ltd’s (NCDEX) transaction charges on its website for everyone to see.

It’s a right step in terms of transparency. But the order is rather unfair on NCDEX, giving the impression that the commodity bourse has been involved in financial impropriety and that members’ funds may be at risk when deposited with the exchange….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

From Farmonline.com.au: Sugar is looking sweet for Australian growers for the current and 2009-10 season - thanks to the low Australian dollar and cuts in production in the European Union and India.

Increased demand from China and India and the continued diversion of Brazilian sugar cane into ethanol production is also helping boost world prices in the short-term, according to the latest forecasts from ABARE….. Full Article: Source

Posted on 03 March 2009 by VRS |  Email |Print

ETF securities has published a presentation on ‘The Fundamentals of Agriculture’. Synopsis:

  • A growing world population and rising per capita incomes provides an enduring backdrop for growth in world food demand.
  • Agriculture ETCs saw their largest inflows since April 2008 on week ended Jan 23.
  • A total of $56 million of inflows occurred across a wide range of softs and grains.
  • Agricultural commodities returns have outperformed most asset classes through the credit crisis in 2008 and longer time horizons.
  • Agriculture ETC prices generally have a low correlation with the business cycle.
  • The agriculture/growth correlation is akin to safe-haven commodities such as gold over the long run, averaging close to zero over the past 10 years.

The presentation is available at Source

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