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Commodities Briefing 20.Mar 2009

Posted on 20 March 2009 by VRS |  Email |Print

From FT: Commodities prices surged on Thursday as investors sought protection against the risk of higher inflation by buying everything from oil and gold to copper and sugar.

Plans by the Federal Reserve to buy $300bn of US government debt triggered the stampede into commodities markets, which had suffered sharp price falls on worries that the world was heading for a depression. For the first time in almost a year, traders looked to oil and other raw materials as a hedge against an unexpected jump in prices……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Theaustralian.news.com.au: Oil closed above $US50 a barrel in New York for the first time this year after investors reacted to the Federal Reserve’s latest economic intervention by pouring into commodities.

Light, sweet crude for April delivery settled at $US51.61 a barrel, up $US3.47 or 7.2 per cent on the New York Mercantile Exchange. Oil last closed over $US50 on November 28, 2008……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From BBC: The world economy is set to shrink by between 0.5% and 1.0% in 2009, the first global contraction in 60 years. In its gloomiest forecast yet, the International Monetary Fund (IMF) says that developed countries will suffer a “deep recession”.

The global economic body says “the prolonged financial crisis has battered global economic activity beyond what was previously anticipated”……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Nst.com.my: The global economic growth forecast is constantly being revised downwards. Both the Bretton Woods Institutions — the World Bank and the International Monetary Fund (IMF) — have forecast negative growth for 2009.

The IMF expects the global economy to contract by 0.6 per cent this year. The World Bank notes this is the first such contraction since World War 2, with growth at least five percentage points below potential……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Telegraph: Growing populations, falling energy sources and food shortages will create the “perfect storm” by 2030, the UK government’s chief scientist Professor John Beddington has said.

The demand for resources will create a crisis with dire consequences, Prof Beddington predicts. Demand for food and energy will jump 50 per cent by 2030 and for fresh water by 30 per cent, as the global population tops 8.3 billion, he is due to tell a conference in London. …..Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Reuters: The global food price crisis is far from over despite lower commodity prices and more protectionism could worsen the situation for developing nations in the face a severe economic downturn, a top World Bank official said on Thursday.

Speaking at the Reuters Food and Agriculture Summit, World Bank Managing Director Ngozi Okonjo-Iweala said Group of 20 leading developed and developing countries should keep promises they made in November not to impose any new trade-restricting measures for 12 months…….Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Reuters: Latin American stocks, bonds and currencies gained on Thursday as rising commodity prices supported the outlook for the raw material-exporting region, despite a poor Wall Street performance.
“Latin America is well positioned to rally together with risk assets following the change in the Fed’s stance,” RBS Greenwich Capital’s analysts Flavia Cattan-Naslausky and Benito Berber-Lopez wrote in a research note……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Allafrica.com: Breaking SA’s dependence on commodity exports required enterprise and innovation — skills that are in short supply in SA, Finance Minister Trevor Manuel conceded last night.

Singling out platinum production, which has not been spared by the global economic downturn, Manuel said there had been inadequate research and development in SA……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Reuters: A crash in oil prices has confirmed the dominance of fossil fuels, OPEC ministers and other energy producers said on Thursday, but they also stated their commitment to fighting the pollution they generate.

Even the environmentalists who addressed the final day of an OPEC seminar acknowledged oil was a fuel for the future, with oil, gas and coal expected to account for around 80 percent of the world’s energy until 2030……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Thisismoney.co.uk: UK Energy minister Mike O’Brien today called on Opec, the Saudi-led cartel of oil producers, not to engineer a new spike in the oil price.

O’Brien said the cartel was right not to cut production at the weekend but called on it to continue co-operating with the rest of the energy consuming world……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Bloomberg: Barack Obama’s proposal to charge billions of dollars for pollution permits has divided businesses, environmentalists and Democrats all needed to help pass a U.S. law to limit climate damage from greenhouse gases.

The president, top members of his party, some Republicans, and corporations such as General Electric Co. and Duke Energy Corp. all support fighting global warming through setting up a European-style market for trading permits to release carbon dioxide……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 20 March 2009 by VRS |  Email |Print

From AP: European Union leaders agreed Thursday on a two-year euro5 billion ($6.84 billion) energy package likely to include gas pipelines and plans to bury climate-damaging carbon, the European Commission president said.

“We have agreement not only on principle but on funding and concrete projects,” Jose Manuel Barroso said after the first day of a two-day EU summit in Brussels……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 20 March 2009 by VRS |  Email |Print

From Businessgreen.com: The low price of carbon might have attracted plenty of criticism, but those in the know are already preparing for the post-2013 recovery.
The first wave of trading in EU carbon allowances (EUAs) for the next phase of the scheme starting in 2013 is expected to take off within the next few months, in a sign that many participants in the market remain confident in its long term prospects……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 20 March 2009 by VRS |  Email |Print

From Business-standard.com: By expressive their exasperation at not being able to convince the public and political leaders about how close the earth has come to climate catastrophe, the environment scientists who gathered at Copenhagen last week for a global meet on climate change were signalling having reached a cul-de-sac.

Whatever little was happening on emission reductions through the carbon trading mechanism has been halted by the collapse of the carbon market, in the wake of the global economic recession. At the same time, no headway has been made in crafting a global climate treaty, due by the end of 2009, to eventually take the place of the Kyoto protocol on climate change that expires in 2012……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 20 March 2009 by VRS |  Email |Print

From Businessspectator.com.au: Gold jumped to a near three-week high as the US dollar tumbled and inflation concerns flared after the Federal Reserve unveiled plans to spend $US300 billion on long-dated Treasuries.

Spot gold rose to a peak of $US961.50 an ounce, its highest since February 27, and was at $US955.75/956.95 an ounce at 1606 GMT (0306 AEDT), from $US940 late in New York on Wednesday……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Mineweb.com: CIBC World Markets says it is maintaining its forecast of $950/oz gold this year and $1050/oz for 2010. In a recent analysis, CIBC metals analysts Barry Cooper, Cosmos Chiu and Brain Quest declared, “Strength in gold is coming from investment demand that is unprecedented.”

They suggested that gold ETF demand “is offsetting any fabrication slumps that are occurring due to decreased discretionary spending on luxury goods.”…..Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Theaustralian.news.com.au: Gold closed sharply higher in New York, rising nearly 8 per cent and easily breaking back above the $US900 an ounce level.

Analysts said the move was a continuing reaction to late-Wednesday news that the Federal Reserve would purchase up to $US300 billion ($446 billion) of long-term Treasury securities and hundreds of billions more in mortgage-backed securities……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Mineweb.com: Given the turmoil in markets everywhere, it’s hardly surprising that so many black economic empowerment (BEE) deals in South Africa have slipped deep underwater, especially within the mining sector, where commodity price crashes have created a separate cluster of problems.

Gold bullion is about the only commodity that’s been treated with any respect; it’s within that subsector that some distinct BEE success stories may be found……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Bloomberg: Copper rose above $4,000 a metric ton for the first time since November in London, gaining with other metals as a Federal Reserve plan to buy assets pulled the dollar lower and fanned speculation about an economic rebound.

The U.S. Dollar Index, which measures the greenback against six other currencies, dropped as much as 2.3 percent, extending yesterday’s 2.7 percent retreat. Aluminum advanced to the highest in five weeks……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Bloomberg: The Australian and New Zealand dollars traded near two-month highs as commodity prices surged and the U.S. currency dropped on concerns the Federal Reserve’s plans to buy government bonds will revive inflation.

The currencies also traded near the strongest in two months versus the yen as prices rose by the most this year for commodities that generate more than half of the South Pacific nations’ export revenue……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Reuters: Oil jumped more than 7.0 percent on Thursday and the U.S. dollar slid further on fears that the Federal Reserve’s plan to pump an additional $1 trillion into the U.S. economy will ramp up inflation in the future.

U.S. stocks slipped as investors took profits in financials that soared after the Fed announced on Wednesday its latest move to end the deepest U.S. recession since the early 1980s……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From CNBC: The dollar fell again on Thursday after suffering its biggest daily plunge since 1985. Should you ditch the dollar? That downward whoosh stemmed from the move made by Federal Reserve which it said it would buy long-term Treasuries; some currency traders compare the move to effectively printing money.

In other words, the move stirred worries that the sharp expansion of the Fed’s balance sheet — which has already doubled in size in the past six months — would spew dollars into global markets and lead to an oversupply of the world’s main reserve currency…….Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Mondovisione.com: Chicago Climate Futures Exchange, a whollyowned subsidiary of Chicago Climate Exchange, announced record trading volume for March. CCFE has traded 60,676 contracts month-to-date as compared to the previous record of 56,429 contracts in the entire month of February 2009.

This record month has been achieved in 13 trading days, with CCFE volumes recording an average of 4,667 contracts per day……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

Nodal Exchange, the first independent electronic commodities exchange for forward locational electric power trading, announced today that it has expanded its Board of Directors.

“We are excited about having such a distinguished Board of Directors to oversee our company and provide strong governance, and we are very much looking forward to commencing trading in April,” said Paul Cusenza, Chief Executive Officer of Nodal Exchange. “Nodal Exchange is an exciting step forward in the development of liquid, nodal markets for electricity,” said Mark Maisto, President Commodities and Retail Markets, NextEra Energy Resources, LLC……Full Press Release: Source

Posted on 20 March 2009 by VRS |  Email |Print

CME Group, the world’s largest and most diverse derivatives exchange, announced that the Commodity Futures Trading Commission (CFTC) has given regulatory approval to clear corn basis swaps and calendar swaps for corn, wheat and soybeans.

The swaps, which will be subject to comparable rules and regulations for listed corn, wheat and soybean futures contracts on the CBOT, are scheduled to be available beginning Monday, April 6, through CME ClearPort, an open clearing service for over-the-counter (OTC) products……Full Press Release: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Londonstockexchange.com: Last year’s tidal wave of economic turbulence saw the number of hedge funds going into liquidation reach the highest number on record, according to new research.

Figures from Chicago-based firm Hedge Fund Research (HFR) indicate that 1,471 funds went under in 2008 - around 15 per cent of the global industry and an increase of over 70 per cent from the previous record……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Forbes: Soft commodities outperform during recessions, but our experts aren’t coming back for seconds. During recessions, various soft commodities like sugar, soybean oil and cocoa have made investors put their money where their mouths are.

Or so proved Gary Gorton of the University of Pennsylvania and K. Geert Rouwenhorst from the Yale School of Management, in their 2004 paper “Facts and Fantasies About Commodities Futures.” As implied by the paper’s title, the two academics measured commodities futures, not spot prices on commodities. …..Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Hardassetsinvestor.com: The interesting thing to note is that soybean meal has performed the best out of all three commodities. Soybean meal is used primarily as animal feed - in combination with other commodities such as corn and other grains. But what about the other two?

Soybeans are sitting around $9 - that’s 27% lower than they were at this time last year, and 44% off the recent high of $16.18 on July 3……Full Article: Source

Posted on 20 March 2009 by VRS |  Email |Print

From Seekingalpha.com: Jim Rogers has been in the media a lot over the past couple weeks and we wanted to provide a summary of these thoughts. He is a noted investor and founder of the highly successful yet now defunct Quantum Fund (with George Soros).

Rogers has been out providing his opinion on various topics and giving us a deeper glance at some of his portfolio plays. We’ve compiled a list of some of his major positions below. First, we’ll examine some of the plays he’s revealed just over this past week…….Full Article: Source

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