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Commodities Briefing 06.Mar 2009

Posted on 06 March 2009 by VRS |  Email |Print

From Hardassetsinvestor.com: Last week President Obama released his proposed budget for FY 2010 and beyond. While there’s no convenient chapter heading in the tens of thousands of words in the budget called “Commodities,” there will be huge impact on the commodity space, at least in the long term.

In a market often driven more by perception than reality, understanding what everyone else thinks about tomorrow is often at least as important as understanding what’s actually happening now. …. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Bloomberg: Commodity markets were more likely driven by supply and demand than speculation in last year’s price spikes, an international group of regulators said, while calling for more powers to guard against manipulation.

The report of a 12-nation task force is the result of a study of last year’s record oil prices and increases in food costs. Oil peaked last July at more than triple current levels and overshadowed the credit crunch among government leaders’ concerns….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Bloomberg: Commodity prices, including oil, have started to bottom out and are likely to rise in the second quarter, supported by signs China’s economic stimulus plan has taken effect, investment bank Barclays Capital forecast today.

The bank predicts the price of a barrel of oil will rise to $50 in the second quarter and to $76 by the fourth, Justin Hyde, director overseeing commodities sales in Asia, said in Hong Kong. He recommends investing in commodity markets at current prices. …. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Fxstreet.com: The economic downturn has continued to spread around the globe. The latest victim to be hit is Central and Eastern Europe (CEE). Several years of high impressive growth rates have been replaced with a dismal economic performance.

And in our view the outlook for the next couple of quarters does not look bright. An overheated housing market funded in CHF, and governments unable to mitigate the situation make for a very bleak outlook….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From FT: Oil prices fell and base metals were mixed as traders reacted with caution to the lack of concrete spending pledges in the new economic stimulus plans announced by China on Thursday.

“The main goal of the Chinese government announcement is to inject some confidence into markets”, said Yingxi Yu of Barclays Capital: “The comments will have a far greater impact on sentiment than on consumption, certainly for the next few months.” …. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Bloomberg: China, the world’s second-biggest energy user, will increase imports of commodities including oil and boost inventories of strategic raw materials while prices are at their lowest in seven years.

China will expand purchases of important resources, Premier Wen Jiabao said in a report delivered to the legislature’s annual meeting today in Beijing….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From FT: The prospect of more regulation of global commodities markets increased on Thursday after a leading watchdog asked for new powers to gather information about transactions in the opaque over-the-counter market.

The International Organisation of Securities Commissions, which launched a task force of commodities markets with the participation of the US, UK, Germany and Japan, among others, also said that regulators needed more information about commodities deals on physical markets, which underlie futures contracts….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Reuters: Regulators need to ensure they have the information they need to detect manipulation in commodity markets and the powers to deal with it, the body grouping the world’s securities regulators said on Thursday.

The International Organization of Securities Commissions (IOSCO) said regulators needed to be better informed, sophisticated in their understanding and powerful in enforcement when dealing with commodities derivatives….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From IHT: Gold prices rose Thursday, ending an eight-day losing streak, as Wall Street resumed its slide after a short-lived burst of optimism. Energy and agriculture futures fell.

Investors scooped up the precious metal in a flight to safety as stocks tanked across the board. Gold is often used as a safe-haven investment in times of economic uncertainty. Recently, however, prices had weakened along with stocks as investors liquidated positions in a variety of investments and moved to the sidelines…… Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From FT: When Europe’s central banks told the gold market five years ago that they would renew their pact to cap their bullion sales, the sector breathed a sigh of relief. Today, gold prices are double their 2004 level and central bank sales far smaller, but the market is still hoping that the Central Bank Gold Agreement will be renewed again.

The current CBGA, which caps sales at 500 tonnes a year, expires in late September, but the banks have in the past announced the terms of a new agreement in March and there is an expectation in the market that a statement could come soon….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Mineweb.com: The two major platinum-holding exchange traded instruments are the London Exchange Traded Commodity run by ETF Securities Ltd and the Zurich-based Exchange Traded Fund run by Zurich Cantonal Bank. The London fund was launched in late April 2007 and the Zurich fund launched three weeks later in mid-May.

There was all sorts of market panic in the previous November and December when rumours of such funds were circulating; the soothsayers were proclaiming that there wouldn’t be enough metal and that the market was insufficiently liquid….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Indexuniverse.com: There has been a great deal of investment demand driven by the advent of exchange traded funds (ETFs), which has made it easier for individuals to invest in the precious commodity. Demand for Gold ETFs and the like showed a 27% increase from 2007 to 2008; growth has continued to accelerate in the early part of 2009.

As recently quoted in the Wall Street Journal: “Trusts have added 306 metric tons of gold to their vaults in the first seven weeks of the year, says Barclays Capital Analyst Suki Cooper. That’s just short of the 322 tons added in all of 2008. If that rate were to continue, this year’s ETF purchases would surpass the 2,120 tons procured for jewelry in 2008, replacing it as the top source of demand.”…. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From ETFguide.com: Who would’ve thought major stock averages would be back to 1996-97 levels in 2009? I am displeased to report that’s exactly where we find ourselves today.

Major corporations like Citigroup (NYSE: C), General Electric (NYSE: GE), General Motors (NYSE: GM) and a host of other companies have failed their long-term shareholders. By decimating billions in market value, such companies have not acted out their role of being reliable “blue chip” stocks….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From AP: Oil prices slumped Thursday after China announced no additional measures to revive its economy, and a variety of government reports suggested that energy use could fall further still.

Light, sweet crude for April delivery fell $1.77 to settle at $43.61 a barrel on the New York Mercantile Exchange. In London, Brent prices fell $2.22 to $43.90 on the ICE Futures exchange….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Ogj.com: Crude oil exports from the Organization of Petroleum Exporting Countries, excluding Angola and Ecuador, are forecast to fall by 430,000 b/d in the 4 weeks before Mar. 21, according to tanker analyst Oil Movements.

“The downhill race between OPEC supply restraint and falling oil demand is still in contention,” said Oil Movements, which forecast exports based on spot and term chartering, in its Mar. 5 report. …. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Zawya.com: Opec could push up sagging oil prices to about $70 (Dh257) a barrel in 2010 but it must comply with agreed production cuts, a prominent Arab oil analyst said.

Nicolas Sarkis, Director of Paris-based Arab Petroleum Research Centre (APRC), said he believed the 12-nation Opec is serious about its bid to curb supplies to prop up prices that have crashed by more than $100 in a few months because of the global financial turmoil….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Nytimes.com: Exxon Mobil Corp. said Thursday it plans to increase spending on capital and exploration projects by 11 percent in 2009 and could invest as much as $150 billion over the next five years, even as many smaller rivals scale back operations.

The world’s largest publicly traded oil company also said it could fuel growth another way — by snapping up competitors or partnering with some of the world’s nationalized, state-run oil companies….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Guardian: A plan to spend billions of euros on overhauling the European Union’s energy infrastructure has become mired in internal squabbling that could deprive the region’s struggling economy of a timely stimulus.
In January, European Commission President Jose Manuel Barroso proposed spending 3.75 billion euros ($4.7 billion) of “spare” EU funds to shore up infrastructure after this winter’s gas crisis left thousands of East European households shivering….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Boston.com: Senator John F. Kerry, who has added global warming atop the Foreign Relations Committee’s to-do list, told industry officials and others today that a clean energy revolution is coming — and they need to get on board.

“We are in the midst of a fundamental shift in our national and governmental priorities that could one day be remembered ‘alongside the presidencies of Roosevelt, Johnson, and Reagan’ as truly transformational,” Kerry said….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Theage.com.au: The Australian Government insists that it is not changing its plan to launch an emissions trading scheme in just over a year’s time, but the pressure to do so is rising as bad economic numbers roll in, and the advice it is getting from the business community has split in a very interesting way.

The general impression is that business lobby groups are pushing back uniformly and predictably against the emissions trading regime as economic headwinds roar in from overseas and sweep across the Australian landscape….. 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 06 March 2009 by VRS |  Email |Print

From Cleantech.com: The declining value of carbon credits is prompting some major Indian companies to spend money on renewable energy projects instead of preventing pollution.

The Kyoto Protocol awards carbon credits for projects that reduce pollution in developing countries. Companies can finance their projects by selling credits to polluters on international markets. Due to the economic slowdown, credit values have declined by 50 percent….. 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 06 March 2009 by VRS |  Email |Print

From Fnarena.com: Central and Eastern Europe is the latest region to be hit hard by the global financial crisis and as Danske Bank points out, the further the downturn spreads around the world the worse is the demand outlook for commodities.

To account for the current demand and stock supply situation and the potential for the global economy to weaken even further, the bank has cut its commodity price forecasts but it continues to advise its clients to take advantage of the current weakness to lock-in exposure to the commodity sector….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Theglobeandmail.com: Copper slipped Thursday as investors cashed in on near three-month highs amid caution a day ahead of key U.S. unemployment data.

“We have had a pretty good run this week, and I think you’re starting to see some money being taken off the table,” said Pat Donnelly, senior broker with Peak Trading Group in Chicago….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Contrarianprofits.com: Base metals had somewhat of a banner day on Wednesday. Copper rose 9.31 cents from Tuesday’s close to $1.6741/lb. Nickel gained more than 15 cents to finish at $4.5163/lb.

Zinc tacked on more than 3 and one-half pennies, ending at $0.5364/lb. Aluminum increased slightly more than 1 cent and one-half, closing at $0.5945/lb., while lead moved to $0.5148/lb., up 3.55 cents from the previous session. …. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Commodityonline.com: Zinc stocks at the London Metal Exchange have consistently risen through the month of January about 35 percent to end at 345,275 tonnes on the last trading day of the month. LME inventories of nickel grew by 5,262 tonnes during January, to reach 84,078 tonnes by end-month.

Although nickel prices over the course of January did not return to the lows seen in December, they kept to relatively low levels throughout….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Mineweb.com: Coal mines are at their most affordable for years but only a few cash-flush or state-backed buyers will be able to seize the opportunity.

The commodities boom driven by Chinese and Indian demand pushed coal and mine prices to record highs in 2008….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Bloomberg: The yen headed for a sixth week of declines against the dollar on concern that Japan’s political turmoil and economic slump are worsening, reducing the appeal of the currency.

The yen was poised for its longest losing streak versus the greenback in nine months after local media reported Japanese prosecutors suspect a group headed by Trade Minister Toshihiro Nikai of taking illegal political donations….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Portfolio.hu: Correlation between Central and Eastern European currencies is expected to remain tight in the months to come, while there have been signs over the past days that Hungary’s forint was separated from the others, a Reuters poll showed on Thursday.

According to the consensus of estimates, though the EU’s main emerging currencies should recover from steep losses only in more than six months’ time. The analysts and strategists said the deepening global crisis would continue to put the entire region under pressure….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

Dubai Gold and Commodities Exchange (DGCX) today said volumes in February were 90% higher than the previous month and maintained the upward trend despite the worsening economic climate.
Currency futures emerged as the key driver of volume for the month, taking total traded volumes to 72,904 contracts in February 2009 compared with 38,366 contracts in January 2009, although down from 117,442 contracts during the same month last year. Average Daily Volume (ADV) in February doubled to 3,645 contracts from 1,827 contracts in the previous month….. Full Press Release: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Forbes: Agricultural commodity prices look set to fall this year and then stabilise in 2010 although grain markets may rebound from recent lows, the Economist Intelligence Unit said on Thursday.

The EIU said weaker demand, ample supply, lower global trade levels and difficulties raising finance should keep prices at relatively low levels, projecting a 26.2 percent decline in its Food, Feedstuff and Beverages (FFB) index in 2009….. Full Article: Source

Posted on 06 March 2009 by VRS |  Email |Print

From Bloomberg: Global cocoa-bean processing will drop by 1.8 percent this season as the slumping economy erodes consumption, said Kona Haque, a London-based commodities strategist for Macquarie Bank Ltd.

“The demand outlook is looking shaky,” and the world may “return to surplus” cocoa production in 2010, Haque said today at an industry conference in Miami. “This is no ordinary recession.” …. Full Article: Source

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