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Commodities Briefing 26.Oct 2010

Posted on 26 October 2010 by VRS |  Email |Print

From Guardian: Rising food prices and shortages could cause instability in many countries as the cost of staple foods and vegetables reached their highest levels in two years, with scientists predicting further widespread droughts and floods.
Although food stocks are generally good despite much of this year’s harvests being wiped out in Pakistan and Russia, sugar and rice remain at a record price……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Cnbc.com: Corn is up 45 percent the last three months. We haven’t seen cotton prices this high since after the Civil War. Soybeans are up. Oil is up. Metals are up. So are coffee and cocoa.
In this era of massive liquidity, everything is up, except for food prices—specifically processed food (made from many of the same commodities and other ingredients whose prices have risen)……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Foodnavigator.com: Food manufacturers may have to face up to high sugar and corn prices over the coming year after food commodity prices shot up in October.
Analysing the recent spike in prices in its monthly overview of the commodities market, Rabobank said: “Tightening fundamentals and exchange rate movements played a major role in the price gains across a range of agricultural commodities.”………………………………………Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From WSJ: Investors are becoming pretty familiar with the notion that the velocity of money collapses in a liquidity trap, which is to say when interest rates drop to zero.
But the velocity of commodities also falls when official interest rates hit the lower bound, according to John Hussman, manager of an eponymous fund. Put another way, investors hoard commodities when interest rates are low enough, squeezing prices……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Cityam.com: China’s restrictive export practices in rare earth metals have intensified fears among traders and market analysts that a bubble is forming in junior mining stocks such as Canada’s Rare Element Resources, Quest Rare Minerals and Avalon Rare Metals.
These companies have seen their share prices surge in recent months despite the fact that they are not yet extracting any rare earths……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Theglobeandmail.com: Among the hottest commodities these days are the rare earth elements – obscure metals used widely in key technologies such as smart phones, televisions, hybrid cars, lasers and military equipment.
These elements aren’t actually rare, or earths, for that matter. They are metals that are found readily on Earth’s crust, but not in concentrations that make them easy to mine……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Moneylife.in: China, the world’s largest producer of rare earths, has been intervening in the mining and production of these commodities in order to jack up prices. While a few rare earth metals have seen a spike in values, it looks like the invisible hand will eventually triumph over state-sponsored capitalism
Rare earth metals are commodities. Like other commodities they have been on the rise lately, but exactly the reason why stands as a parable for state-controlled capitalism in general and its consequences, especially in China……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Bloomberg: Global supplies of rare-earth elements will fall short of demand, which will grow by an average of 9 percent annually to the year 2014, Lynas Corp. said yesterday.
Total demand for the group of elements, used in products such as industrial magnets, flat-screen TVs, and military weapons systems, is likely to grow to 190,100 metric tons in 2014, from an expected 136,100 tons this year, Lynas, a Sydney- based, rare-earths developer, said in a presentation……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Telegraph: Aluminium is one of the most unfashionable commodities around – which is exactly why some investors are starting to take notice. After all, for contrarian investors, the best time to buy an asset is when everyone else thinks you shouldn’t. They call it the point of maximum pessimism.
Unlike commodities such as copper, aluminium ore (bauxite) is actually relatively common, constituting about 8pc of the Earth’s crust. The main limiting factor in its production is access to cheap power……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Ninemsn.com.au: The price of copper rose on Monday above $8,500 a tonne for the first time since the fall of Lehman Brothers, as the sliding dollar coincided with buoyant investment demand.
The market for the red metal, a crucial cog in the global economy as it is widely used in manufacturing, has been in relentlessly bullish mode for several weeks as demand is expected to outstrip supply this year and next……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Suite101.com: Palladium is an excellent precious metals investment candidate. With numerous uses, it is now at historic lows, possibly better than gold or platinum. Palladium, one of the precious metals and considered part of the platinum group is an investment whose time may have arrived.
With a current price of around $590 per ounce, which is only 35% of the current price of an ounce of platinum and slightly over 25 times the price of silver, this may be an investment worth considering as the economy remains in a jittery state……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Rt.com: While gold and silver have drawn the spotlight over 2010, platinum group metals, and particularly palladium are attracting increasing attention. 2010 has seen growing industrial and investment demand for Platinum group metals (PGMs).
Anton Berlin, the Marketing Director for Norilsk Ni says the industrial demand reflects the economic rebound, with the turnaround of the automaking sector, particularly in emerging economies, underpinning demand for platinum and palladium – used extensively in exhaust management technologies……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Vancouversun.com: Uranium prices started moving higher in 2004 with the rest of the global commodity surge but its popularity waned when the markets corrected. It’s now regaining traction as governments look for large-scale energy sources to meet huge future power demands. Investors may want to put it on their radar screens too.
Uranium spot prices have quietly crept up and now sit at about US$49.25 per pound, their highest levels in more than 10 months and up from about US$41.50 in mid-July……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Hardassetsinvestor.com: Remember our toxic trio: arsenic, the old poudre de succession; cadmium, the stuff of paints and batteries; and mercury, named for the ancient Roman god of speed, trade—and, these days, less and less.
Despite its extreme toxicity, mercury was once commonplace. It was often used in the milliner’s trade—as mercuric nitrate, or Hg(NO3)2—to make felt for hats, with some quite unpleasant side effects: For one, those poisoned by the metal appeared insane, giving rise to the phrase “mad as a hatter.”………………………………………Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Mineweb.co.za: A warning that if long term broad capital controls are taken up by G20 members this could be disastrous for the global economy but positive for gold and other precious metals.
Gold dropped to $1,314.5 late last week before recovering to $1.325. It seems that this was due to the G-20 proposals from the U.S. indicating a possible attempt at calming currency markets. This weekend the G-20 is meeting to discuss the current currency turmoil in the markets……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Mineweb.co.za: Every single day as the values of currencies, bonds, equities, commodities and gold fluctuate, investors try to determine which sector is going to yield the best returns over the next 3- 5 years.
While past performance is no guarantee of future performance, gold has been one of the best performing assets over the last decade, and if one considers the fundamentals driving the gold price, it is reasonable to assume that this trend is going to continue in the foreseeable future……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Bloomberg: Iran will notify the Organization of Petroleum Exporting Countries Secretariat of a rise in its oil reserves toward the end of this year, said Iran’s OPEC Governor Mohammad Ali Khatibi.
Iran’s proven oil reserves have reached 150.31 billion barrels, Oil Minister Masoud Mir-Kazemi said Oct. 11……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Reuters: Gas-producing countries are studying OPEC’s experience as they try to build a global natural gas market, the head of the recently-launched Gas Exporting Countries Forum (GECF) said on Monday.
Leonid Bokhanovsky told reporters the group was set to propose a gas market model based on OPEC experience……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Rigzone.com: Recent increases in oil reserves in Iraq, Iran and Venezuela are “good news,” but it remains unclear whether they will contribute to future supply, Nobuo Tanaka, executive director of the International Energy Agency, or IEA, said Monday.
“To have more reserves is certainly good news, because it gives us a more precise prediction of costs and necessary investments,” Tanaka told Dow Jones Newswires at an energy conference in Moscow……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Commodityonline.com: The Great Game is afoot and no matter how we may disapprove of the Global Empire, we would be wise not to discount the cards it alone holds.
Geopolitics is not called The Great Game without reason. The game of dominating the world’s resources, nation-states and alliances is like a combination of Go and chess, with the threat of military conquest or defeat always hovering over the statecraft and financial game……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Etftrends.com: Commodity exchange traded funds (ETFs) are surging higher driven by the commitment by the financial administrators from the Group of 20 Nations to stabilize the currency markets by avoiding competitive currency devaluations.
In a statement released at the conclusion of their two-day meeting in South Korea on Saturday, it was reported that they would “move toward more market-determined exchange rate systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies.”………………………………………Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Cnbc.com: Active fund managers have suffered through a perfect storm of obstacles the last three years —and investors have noticed. Buffeted by markets made more efficient by high frequency traders, high stock correlation, and an increasing focus on costs, actively managed mutual funds have failed to earn their high management fees and lost ground to exchange traded funds, ETFs, and index funds.
“I ditched actively managed funds and started investing in ETFs a few years back,’’ says Ary Rosenbaum, an attorney in Garden City, New York. “I was tired of actively managed funds failing to meet their benchmark.’’………………………………………Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Bloomberg: JPMorgan Chase & Co., the second- biggest U.S. bank by assets, plans to introduce an exchange- traded fund for copper, seeking to benefit from increased investment demand for the metal used in pipes and wires.
Shares in the J.P. Morgan Physical Copper Trust will trade on the New York Stock Exchange “as soon as practicable”, the New York-based bank said in a filing to the Securities and Exchange Commission, without giving a precise date……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Voanews.com: Finance ministers from the G20 nations ended two days of meetings in South Korea with a pledge to ease trade tensions that threaten global recovery. Though short on details, the informal agreement on exchange rates is seen as a step forward in defusing tensions that could lead to protectionism and possible trade wars.
But without a viable enforcement mechanism, according to noted American economist Joseph Stiglitz, the pledges are nothing more than symbolic……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Ibtimes.com: The meeting of G20 finance ministers over the weekend did not produce any concrete policies to address the global currency war. However, behind the scenes, China and the U.S., the two major combatants, may already have already struck an agreement, said Douglas Borthwick, head trader of Connecticut-based Faros Trading.
Borthwick thinks China and the U.S. may have agreed to gradually appreciate the Chinese yuan over 5 years. ………………………………………Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Abc.net.au: With companies keen to go carbon neutral, forest carbon offsets have become a hot item for the big end of town. But Brendan Wintle and Sarah Bekessy argue that unless biodiversity is included, the real opportunities will be missed.
By the end of this year, Rupert Murdoch’s News Corporation will be carbon neutral across all of its businesses. They are not alone; the World Bank Group, Formula One, and Virgin Blue are just a few of the many big players who have committed to reduce their greenhouse gas emissions and offset the remainder by investing in forests and other environmental initiatives……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From Nbr.co.nz: The world’s biggest dairy exporter, Fonterra, says it wouldn’t consider the kind of Opec-style industry grouping which the Irish Dairy Board has been urged to set up globally to represent milk producers.
“Cartels are illegal - we cannot co-operate with other sellers on price,” said a spokesman for Fonterra, which sells nearly 40 percent of the world’s internationally-traded milk……………………………………….Full Article: Source

Posted on 26 October 2010 by VRS |  Email |Print

From CNN: Economists at Goldman Sachs estimate the Federal Reserve may need to buy a staggering $4 trillion worth of assets such as Treasury securities to get the economy rolling again. The Goldman economists, Jan Hatzius and Sven Jari Stehn, don’t expect the Federal Reserve to go nearly that far when it resumes its asset-purchasing quantitative easing policy.
Citing many officials’ unease with the prospect of adding significantly to the Fed’s already bloated balance sheet, Goldman expects the Fed to end up buying around $2 trillion worth of assets over the next few years……………………………………….Full Article: Source

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