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Commodities Briefing 13.Mar 2009

Posted on 13 March 2009 by VRS |  Email |Print

From Reuters: Massive government debt issuance to fight the worst recession in many decades may push commodity prices higher without boosting industrial output.

This stagflation scenario, feared by some economists, is not on the horizon yet. Since 2009 began, macroeconomic data suggests the industrialized world is experiencing zero inflation, even deflation, from falling prices of energy, cars, houses, stocks and non-government bonds….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Guardian: The heads of top exchange operators redoubled a push on Thursday for fewer U.S. regulators, even as the acting head of the Commodity Futures Trading Commission warned that the current crisis might not be the time for a major restructuring of market oversight.

The chief executives of Nasdaq OMX and the Chicago Board Options Exchange said the dual oversight from both the U.S. CFTC and Securities and Exchange Commission was confusing and overlapping, suggesting the overall political push to rethink markets would present an ideal opportunity to merge them….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Forbes: Commodities prices are higher as buying interest for everything from gold to corn gains momentum amid a rally on Wall Street.

Gold prices are extending their gains, logging a 3 percent bounce over two sessions. Prices are benefiting from signs of resilience on Wall Street, as stocks rise for a third straight day after weeks of unrelenting selling….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Hardassetsinvestor.com: Yale study on recessionary commodities discusses the performance of commodity futures over various phases of a business cycle - complete expansions and contractions (aka recessions) - using data spanning 1959 to 2004.

Since we find ourselves in the contract-y bit (do we ever!), maybe we can look at the past not only for some opportunities, but for some hint of how much longer things may stay so dour….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Seekingalpha.com: As falling equity prices prompt an increasing number of investors to grasp at “real assets” like commodities, the PowerShares DB Agriculture fund (DBA) has gained momentum in the Sector Momentum Tracker ETF Sector Momentum Table, moving from the No. 42 spot on December 30, 2008, to the No. 26 position on March 3, 2009.

While the inevitable attention to commodities has not surprised many of the analysts predicting a protracted recession, the outperformance of DBA has certainly helped to attract downtrodden investors….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From FT: The oil market is desperate to know whether Opec will cut production further but the ministers gathering for this weekend’s meeting of the organisation in Vienna have been sending distinctly mixed signals.

For the past week oil prices have been gyrating up and down by 5 per cent to 10 per cent as traders have tried to figure out what the oil producers’ cartel will do. Benchmark oil futures on Thursday traded in New York at $45.45, up $3.12….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Moneycontrol.com: The OPEC meeting will definitely play a crucial role although the cut that they have announced in the last couple of times have not really given a boost to crude oil prices. It is basically more the demand side that is creating it.

Today’s news of another 1 million barrel kind of a short fall for 2009 will create some jitters in the market. But overall we have seen for an intraday position if one wants to trade, the range would be around USD 42-44 per barrel levels wherein crude prices will move over and across….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Bloomberg: Crude oil traded near $47 a barrel in New York, after posting the biggest gain in three weeks yesterday, as OPEC prepares to meet this weekend to consider a fourth production reduction.

The global oil market is oversupplied and OPEC will cut output if needed, Shokri Ghanem, who chairs Libya’s state-run National Oil Corp., said yesterday. Other ministers have called for the group to halt reductions….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Guardian: Renewable energy companies have accused the government of undermining its own “green” industrial strategy by ending subsidies for solar energy under the low carbon buildings programme (LCBP).

The Renewable Energy Association (REA) said it was “astonishing” and worrying that solar grants had been frozen since 26 February although there was still money in the building programme’s budget….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Energychoices.co.uk: Nearly all UK households have considered or would consider buying solar panels to generate electricity at home if “the price is right”.

Ninety-one per cent of households would consider installing solar panels if they would be better off financially, according to new research from the environmental charity Centre of Alternative Technology (CAT)….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Fleetstreetinvest.co.uk: These are hard times for miners. But if you’re not afraid of getting your hands a little dirty – and you choose carefully – there’s money to be made in coal. Let’s have a look at how.

Down in Australia, where coal and other commodities are the life blood of the economy, there have been long faces as the price of coal has tumbled 60% from its peak a year ago….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Triplepundit.com: When it comes to urgent environmental crises, water is clearly in a class of its own. Few other issues have the same far-reaching impact on human health and well-being, economic sustainability, or national security. After all, you can live without oil; you can’t live without water.

So it’s no surprise that many of the latest environmental campaigns along with a growing media debate are posing the question, “Is water the new carbon?”…. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Mineweb.com: UBS Investment Research has moved gold to overweight from neutral, citing the “broad uncertainties in the current macroclimate.” In their Q-Series: Gold research, analysts Daniel Brebner and James Luke, strategist John Reade and economist Larry Hatheway said they have determined that “future returns on gold are likely to be positively asymmetric, with potential upside US$2,500/oz.”

The team also suggested that the current environment as “having a ‘low margin of error’ for central bankers.”…. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Reuters: Numis Securities said it is raising its 2009 gold price forecast to $900 an ounce from $700 previously, citing risk aversion, the prospect of a weaker dollar and fears global stimulus measures could cause inflation.

Strong demand for physical stocks of the precious metal for investment products such as coins and to back commodity exchange-traded funds is also likely to boost prices, it said….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Commodityonline.com: Traditionally, gold would have an inverse relationship with dollar. When US dollar rises gold falls and vice versa. However, in the past few months both the gold and US dollar are simultaneously rising.

Daniel Tenengauzer, Head of foreign exchange strategy at Merrill Lynch notes that the correlation between the US dollar and the price of gold has suddenly and inexplicably broken down….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Commodityonline.com: What will be the highest price of gold in this year? This has become a major discussion pint among investors across the globe now.

According to experts, gold prices are on course to break record levels due to the safety of the commodity as an investment….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Norwichbulletin.com: When gold prices topped $1,000 an ounce a year ago, people were lined up out the door at Gem Shop & Diamond Source in Rockton, waiting to sell their old jewelry.

They haven’t stopped since, even as gold prices have fluctuated. “People have found a lot of gold on hand that isn’t necessarily needed,” said co-owner Kevin Mueller. “This has helped people with some of their expenses, be it their mortgage, car payments or medical bills.”…. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Itweb.co.za:Gold bullion’s price surge since 31 October 2008 has been increasingly disconnected to ever-increasing reports that demand for the metal from India, the world’s biggest consumer of gold for both investment and jewellery purposes, has fallen out of bed in reaction to surging prices.

At the same time, the dragged-out crisis in credit and related markets has seen gold in heavy demand by exchange traded funds; the world’s biggest, the SPDR Gold Shares ETF currently holds physical gold bullion worth just under $30 billion on behalf of investors….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Mineweb.com: Listed gold and silver stocks may rank as top performing, relatively, in the global resources sector, and likely across all equity sectors, but strong contenders for the thrones can be seen in the form of, particularly, listed copper and uranium names.

Listed gold stocks, with a global investible capitalisation of around USD 191bn, have bounced 112% from low prices seen four months ago, but remain 50% off price highs, measured on a globally weighted average. …. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Reuters: U.S. copper futures ended a shade off Thursday after hitting their lowest levels in more than a week as a rise in inventories and slower Chinese industrial activity placed a cap on the market.

Copper for May delivery HGK9 eased 0.10 cent to settle at $1.6245 a lb on the New York Mercantile Exchange’s COMEX division….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From SMH: Work derived from mining investment will be halved - at least - over the next two years as the next round of projects are “slaughtered” by falling commodity prices and frozen credit flows, an economic forecaster says.

BIS Shrapnel said yesterday a collapse in business investment would drive the second phase of the economic downturn, after the initial period of lower household spending….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Dailymail.co.uk: Analysts have warned of the emerging threat of currency wars following a Swiss market intervention. The Swiss franc fell by as much as 3.2 per cent against the euro to 1.53 - the biggest decline since 1999 - after the country’s central bank said it was taking deliberate measures to weaken its currency.

The move raises fears of retaliatory measures by other countries seeking to give their exporters a competitive edge….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From BBC: Crisis-hit economies in Central and Eastern Europe have seen their national currencies slide against the euro, fuelling a discussion about whether they should be allowed to adopt the euro sooner rather than later.

Of the 10 countries which joined the European Union in 2004, only two have already entered the eurozone….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From WSJ: U.S.-based investment firm Small Enterprise Assistance Funds will soon launch a $75 million fund in India focused on taking stakes in agriculture-related businesses, a senior executive said.

The SEAF India Agribusiness Fund is the investment firm’s first India fund and is expected to have its first close by April and its final close by the end of the year, SEAF India Investment Advisors Managing Director Hemendra Mathur told Dow Jones Newswires in a recent interview. So far, $35 million of the fund has already been raised, he said….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From FT: Qatar’s sovereign wealth fund will turn its focus to commodities, particularly food and energy, in the second half of the year, a senior official said on Thursday.

Hussein al-Abdullah, executive director of the Qatar Investment Authority, which is estimated to have assets of about $60bn (€46.6bn, £43.1bn), said the fund would do “nothing” until the beginning of the second half of the year, when it will review its strategy….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Seekingalpha: The commodities-versus-stocks debate took an interesting turn last Friday. The Market Vectors Hard Assets Producers ETF, which tracks the Rogers - Van Eck Hard Assets Producers Index, ended its week 13.1% lower, at $18.58 per share, but the raw materials in which many of HAP’s constituents deal hardly shuddered.

Shares of the GreenHaven Continuous Commodity Index ETF edged 0.3% lower, to close at $20.75 by Friday. GCC mirrors a benchmark of 17 commodity futures contracts, including metals, agriculturals and livestock, petroleum products and foodstuffs….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Upi.com: A new futures trading exchange backed by Wall Street giant JP Morgan & Chase and others said it expects to be open for business in June.

ELX Liquidity Exchange Chief Executive Officer Neal Wolkoff said in a statement that the all-electronic market anticipated approval from the Commodities Future Trading Commission this spring…. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Euronext.com: NYSE Liffe, the global derivatives business of NYSE Euronext (NYX), announced today that it will launch a range of soft commodity products on its pioneering Bclear (OTC derivatives) service on 30 March. The move further develops Bclear, which was launched in 2005, into a multi-asset class platform.

Individual equity and index contracts, and credit default swaps, are already available on Bclear….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Reuters: India is keen to import 2 million tonnes of duty-free white sugar in the next six months, trade and industry sources said, but limits on stocks held by dealers may depress prices, making overseas purchases unviable.

A senior industry official on Thursday said the government had sought the Election Commission’s approval to cut import duty on white sugar, currently 60 percent, to zero….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Euractiv.com: As the world’s population approaches ten billion, issues like climate change, growing scarcity of oil and availability of quality land and water are challenging the planet’s capacity to produce enough food for everyone - a paradigm shift that could potentially pave the way for a new global ‘food crunch’.

According to the United Nations Food and Agriculture Organisation, “food security exists when all people, at all times, have access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life”….. Full Article: Source

Posted on 13 March 2009 by VRS |  Email |Print

From Businessweek.com: In most regions, inflation has fallen sharply from its 2008 levels, largely on sharp declines in oil prices. Most countries are seeing rapidly falling inflation rates, also known as disinflation.

However, several countries are dangerously flirting with deflation—or outright falling prices. On the brighter side, the unexpectedly rapid slowing in total and core consumer prices adds to the already ample leeway the central banks have to keep rates low. …. Full Article: Source

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