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Commodities Briefing 11.Mar 2011

Posted on 11 March 2011 by VRS |  Email |Print

From AP: Higher oil prices are slowing global economic growth, and the impact is likely to spread in coming months. Oil prices helped raise the U.S. trade deficit to a seven-month high in January, when crude prices were $87.50 a barrel.
Oil is now trading at more than $100 a barrel, suggesting the gap will widen in coming months. Even fast-growing China isn’t immune — higher oil prices contributed to a rare trade deficit there in February……………………………………….Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

From Reuters: Investors banking on an across-the-board rise in commodity prices this year are setting themselves up for a fall and they should instead be actively managing for winners, Investec Asset Management said.
After several years of commodity prices moving largely as one, Investec’s co-chief investment officer Mimi Ferrini looks favourably on active strategies that are bullish on natural gas and crude oil, while playing the interaction between the asset class and related equities, like gold mining companies……………………………………….Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

Opalesque Industry Update: Commodity markets continued to increase in February despite mixed global macroeconomic conditions. Prices were supported by inflationary concerns and strong emerging markets demand amidst tight inventory levels for raw materials.
Nelson Louie, Global Head of Commodities at Credit Suisse Asset Management, said, “Uncertainty in the Middle East and North Africa remains high. The focus of the ever-changing situation shifted from Tunisia and Egypt to Libya. As a result, concerns that unrest would spread to oil-producing countries were materialized……………………………………….Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

From Cnbc.com: The commodities boom was as severe and swift as ever in history, but tremors have entered the markets over the last few weeks as investors begin to wonder: Could it all be over?
Copper futures have marched to record highs, rising more than 40% since the middle of last year……………………………………….Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

From Thestreet.com: Global macro trading isn’t just a fancy name to impress your friends — it’s the search for trading profits in indices versus individual securities. While there are infinite variations on the classic approach, the primary reason for trading “macro” is finding non-correlating assets. Yes, all assets are correlated to some extent — you expect me to believe Treasuries don’t have anything to do with the price of tea in China?
However, correlations break down, enabling traders to take advantage of multiple markets while staying diversified most of the time……………………………………….Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

From Abc.net.au: A special offer from the group that brought you credit default swaps, catastrophe bonds and the GFC comes the investment plan you’ve been waiting for: Financial speculation in commodities!
Yes that’s right. If you couldn’t get enough of betting your house on the undisputed fact that property prices have (and therefore always will) rise, you can now bet the pantry too! Ever been to the cupboard and thought “How can I profit from this bag of sugar, tin of flour, or can of sardines?” Well now you can make money from these simple household items!………………………………………Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

From Theglobeandmail.com: Higher commodity prices are beginning to skew international trade data, masking underlying strength in some of the world’s largest economies and sending mixed signals about the global economy to jittery investors.
Government reports in Washington and Beijing on Thursday showed the U.S. trade deficit expanded to $46.3-billion (U.S.) in January, the widest in seven months, while China recorded a $7.3-billion shortfall in February, the biggest in seven years……………………………………….Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

From Marketoracle.co.uk: The oil price has been on a rip-and-tear largely owing to the Middle East crisis. The fear and uncertainty overhanging North Africa and the Middle East has also benefited the gold price. Our favorite gold proxy for instance, the SPDR Gold Trust ETF (GLD), recently made a new high and is still above its key immediate-term trend line.
The recent fuel price spike was a consequence of the political turmoil in the North African and Middle Eastern region. This in turn was caused by high food prices…which is mainly a consequence of a weak U.S. dollar since commodities are priced in dollars……………………………………….Full Article: Source

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From Ninemsn.com.au: Surprisingly strong harvests in the southern hemisphere could help ease global grain shortages, but high prices are likely to persist, the US government has forecast.
The US Department of Agriculture predicted that Brazil, one of the world’s biggest exporters of agricultural commodities, would enjoy a record soyabean crop and grow more corn than expected……………………………………….Full Article: Source

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From Wallstreetpit.com: To answer the question in the title of this post, it’s useful to think of an island with only two goods. One of the goods is non-renewable, but highly desirable. The other good is less preferred, but it is renewable (thinking of renewable and non-renewable energy resources, for example).
The key is to distinguish between changes in prices that reflect changes in the relative scarcity of the two goods, and changes driven by increases in the money supply……………………………………….Full Article: Source

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From Emirates247.com: Does the idea of buying gold at present leave you puzzled? Are you in a maze whether to go along with the gold surge or hold back until the price falls to a reasonable level? This is perhaps one of the most pressing questions scores of other buyers might well be facing.
“Gold has given an energetic response to the tensions in the Middle East and this move is synonymous with the safe haven appeal of bullions amidst global macro or geo-political unrest……………………………………….Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

From Hardassetsinvestor.com: Many silver traders and investors regard the gold/silver ratio now and think that old maxim is being proved again. The white metal’s been, er, white hot recently. Silver’s gotten expensive—not just in dollars, but in terms of gold. And as silver’s price has raced higher, the gold/silver ratio has plummeted.
The ratio, which describes silver’s buying power by dividing the per-ounce price of gold by that of silver, has averaged 60:1 over the past 35 years, meaning it’s taken 60 ounces of silver to purchase one ounce of gold. Though with silver’s most recent push to the $36/oz level, it now takes much less……………………………………….Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

From Mineweb.co.za: Investor inflows have helped lift copper to record prices, but expecations of tightening supplies amid global economic growth are also driving the rally, analysts speaking at a metals conference said on Thursday.
Fabricators and some traders say the jump in copper prices does not reflect the physical market as speculators’ positions far exceed orders from industry……………………………………….Full Article: Source

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From Ninemsn.com.au: It should come as no surprise that the strong, positive correlation between the world’s two leading industrial commodities has broken down over the past month. Oil has surged 15 per cent on supply concerns while copper is off 9 per cent from the record high of $10,190 a tonne it hit in London trading in part due to fears of what dearer and scarcer crude might do to the world economy.
But developments in the Middle Kingdom, not just the Middle East, are affecting copper prices……………………………………….Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

From Commodity Online: World’s largest copper user China’s import of the commodity dipped by 19 percent in February compared to same period last year.
According to statistics released by the General Administration of Customs, China imported 235,469 metric tons of unwrought copper and copper products in February this year……………………………………….Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

From Reuters: Though OPEC officials have done their best to quell fears about Middle East oil supply disruptions, experts warn that Libyan unrest could signal a new period of prolonged oil market jitters.
“There is no panic,” Algeria’s oil minister Youcef Yousfi said at the high-profile CERA Week conference in Houston this week, attributing the stellar rise in oil prices to speculators and market psychology……………………………………….Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

From Alarabiya.net: The massacre being committed by Gaddafi against his people and the ongoing war in his country, along with developments in the Arab world, in Egypt, Tunisia, Yemen, Bahrain and Oman, have raised oil prices to unjustifiable levels that have exceeded $110 a barrel.
According to everyone in the oil industry, oil is available in markets. Despite the continuing drop in Libyan production of about 500,000 barrels a day, European refineries are finding all of the oil they need in the markets……………………………………….Full Article: Source

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From Benzinga.com: According to new research released by the International Monetary Fund, there is little difference in the two, at least from an investment standpoint. In their 2010 whitepaper, Serhan Cevik and Tahsin Saadi Sedik found that supply constraints have surprisingly little impact on the prices of commodities.
The researchers found that macroeconomic factors are the main determinants of commodity prices, particularly growth in emerging markets. “Excess global liquidity” (i.e. quantitative easing) and the securitization of commodities into new ETF and mutual fund products for retail investors were also significant contributors. ………………………………………Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

Opalesque Industry Update - The Lyxor Global Hedge Fund Index, an investable index based on Lyxor’s hedge funds platform which tracks the overall hedge fund universe, was up 1.1% in February. The first three-quarters of February was generally quiet and developed equity markets steadily gained. Agricultural commodities and industrial metals steadily rose along with them. Crude oil was abundant, according to inventory reports, and energy prices declined slightly. Investors having quickly stepped away from their previous Emerging market “overweights”, Emerging markets were flattish……………………………………….Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

From Businessinsider.com: In its latest FX Pulse, Morgan Stanley looks at the idea of save-haven currencies, the three most note-worthy typically being The Swiss Franc (CHF), the Yen (JPY), and yes, today’s huge winner, the Dollar (USD).
The firm looked at 18 outbreaks of war since 1990. What it found, specifically, was that the dollar does best at the onset of a crisis. Following that, however, the Swiss Franc outperforms……………………………………….Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

From Reuters: High commodity prices have certainly helped African producers both because it means they get paid more for their exports and it encourages investment to increase production.
But almost all the speakers at the Reuters Africa Investment Summit have agreed that the change in Africa is driven by more than just digging minerals out of the ground, pumping oil or growing crops for foreigners to consume……………………………………….Full Article: Source

Posted on 11 March 2011 by VRS |  Email |Print

From UPI: China is pouring cash — before tons of concrete — into 73 new nuclear power plants and has set sights on Latin America as a potential major source of uranium supplies in the near future. China is already well advanced in securing uranium sources in Africa and Asia.
Uranium exploration and production is on a fast track in South American countries that have prospered on commodity exports and are moving steadily into processing and manufacturing industries that draw on indigenous mining and natural resources……………………………………….Full Article: Source

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