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Commodities Briefing 14.Nov 2011

Posted on 14 November 2011 by VRS |  Email |Print

Jim RogersThe rising demand-supply imbalance in the food industry has pushed up prices of agriculture commodities sharply. But for investors, this may prove to be a blessing as investments in agriculture funds are likely to fare well.
The fire fighting in Europe to contain the debt crises is increasingly putting strain on the global markets. Apart from the likelihood of a cut in public spending by nations affected by the debt crisis, growing population and rising inflation too may increase uncertainty among investors………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

Tom FritzFrance may lose its place as the second-biggest wheat exporter after failing to win more than a dozen tenders in Egypt, the world’s biggest buyer, as shipments from Russia, Ukraine and Kazakhstan overwhelm markets.
Egypt favored cheaper supply from the Black Sea region in the past 17 tenders and cargoes to northern Africa from France’s Rouen, Europe’s biggest grain-export hub, fell to a four-month low in the week ended Nov. 2, port data show. France’s crop office expects a 23 percent drop in shipments in the 12 months ending in June, the most in at least a decade………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

Gold traders and analysts are the most bullish in at least seven years as investors accumulate metal at the fastest pace since August to protect their wealth from a widening European debt crisis.
Twenty-one of 22 surveyed by Bloomberg expect bullion to rise on the Comex in New York next week, the third consecutive increase and the highest proportion in data going back to April 2004. Holdings in exchange-traded products backed by gold rose 27.5 metric tons this week, within 1 percent of the record set almost three months ago, data compiled by Bloomberg show………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

Global commodity markets faced one more week of choppy price movements amid a macroeconomic backdrop that became increasingly unpredictable, oscillating between guarded optimism and hopelessness.
Obviously, political gyrations in the Euro zone took centre-stage which eroded the confidence of market participants. The biggest worry was the potential for contagion to spread from Europe. Heightened fundamental and geopolitical risks are fighting for influence against the escalation of sovereign debt concerns, was a succinct observation of an informed analyst………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

The gold market is trapped in a tug of war between its traditional haven roots and its recent emergence as a risk asset.
While the political upheaval in Europe in recent weeks in theory should have made gold more appealing as a sound store of value, the yellow metal has frequently succumbed to selloffs along with assets that traditionally have been seen as more risky, such as stocks, copper and oil………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

With money markets and Treasuries yielding next to nothing these days, investors are finding income in new places. One area those investors should consider is gold mining. With gold rising in value, mining companies are reaping record profit margins, yet the stock prices are depressed due to lack of investor interest.
A solution for both gold companies and investors may be dividends, specifically gold-linked dividends………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

Gold has confounded market watchers by refusing to behave like a safe-haven and instead has tracked equities over the past few weeks, but the escalating European debt crisis could see bullion ditch its risk-asset mantle and return to record highs.
The debt problems of some of the smaller euro zone states have mortally wounded the premierships of Greece’s George Papandreou and of Italy’s Silvio Berlusconi and hounded the euro to one-month lows against the dollar and eight-month lows against the pound as confidence evaporates over the ability of Europe’s leaders to stem the spread of the crisis………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

Gold’s edging higher over the last few weeks can be attributed to a host of factors but certainly the rising cost of funding. Italy’s debt towards the pivotal 7% has had the market in thrall. The 7% has been seen as the level beyond which Italy would be forced to seek support from the ECB and IMF and, to put it frankly it remains, a moot point whether there is sufficient funding to do much for them.
In short, Gold prices have benefited from what has appeared to be a slow speed train crash in the Eurozone………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

Current gold prices are too high to sustain, and high prices will also hamper investment abroad, an executive of China’s largest gold producer by output, Zijin Mining Group Co. , said Sunday.
“The gold prices currently are unreasonable,” Lan Fusheng, vice chairman of Zijin Mining, said in an interview with Dow Jones Newswires………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

A new Thomson Reuters-GFMS report, commissioned by The Silver Institute, forecasts silver investment will achieve yet another historically high total this year in spite of a significant level of position unwinding by institutional investors.
In the report, “The Silver Investment Market-An Update, November 2011″, Thomson Reuters-GFMS says the outlook for silver prices remains bullish, “with the potential of prices nearing, if not exceeding, the $40/oz, a realistic prospect as the fourth quarter develops.”……………………………………….Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

For gold miners, copper used to be a four-letter word. “Pure” gold stocks traded at a premium to diversified miners and, for the most part still do. And, even if they did pull other metals from the ground, the companies considered them as by-products, credits to be used to offset the cost of getting an ounce of the good stuff out of the ground.
But, gold mining has changed. For the most part, mines are deeper these days, grades are lower, costs are higher and new ounces are harder to come by………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

The Statue of Liberty is one of the most recognizable American icons in the world. And as she towers 305 feet above Ellis Island, what’s Lady Liberty wearing? Copper – 60,000 pounds of it.
Clearly, copper’s big in art. It’s also a key metal that keeps the world economy humming. Copper consumption has grown at an average annual rate of 4% since 1900. China and India – which some analysts describe as the combined market of “Chindia” – where one of every three human beings resides, needs loads of this element to meet its modernization requirements for electricity and infrastructure………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

The majority of corporate Copper mining results are now in for Q3 11, and the overall performance has been broadly weak, said Barclays Research in a breifing. The results of a group of corporates, which account for close to 40% of global mine capacity, showed output falling 7% y/y (-110Kt) and for the year-to-date, a marginally better 4% y/y decline, Barclays: data supportive of china engineering soft landing.
Taken in line with the ICSG data for January to July, which showed flat output year-to-date, current indications point to the overweight probability that global copper mine supply will contract in 2011………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

The world’s biggest metal market, the London Metal Exchange (LME) which accounts for 80 per cent of traded volume in global metal futures transactions, saw record trading volumes last year of 120 million lots equivalent to $11.6 trillion and 2.8 billion tonnes of metal. Pre-tax profit in 2010, limited by the low fees, fell 28 per cent to 12.5 million pounds.
CME Group, the largest futures exchange in the United States, has in recent months appeared to distance itself from a takeover, and a spokesman said on Friday it did not comment on rumours………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

OPEC members that raised oil output earlier this year to compensate for the loss of Libyan crude will cut back their production as the North African state keeps pumping more, the head of the country’s National Oil Co. said Sunday.
“OPEC members who increased their output following the crisis to compensate for the Libyan oil were mistaken,” NOC Chairman Nuri Berruien told Zawya Dow Jones. “They produce different type of crude and they will have to cut back as we’ve already started production again.”……………………………………….Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

OPEC member Algeria doesn’t think there is too much supply in the world’s oil market and will discuss the group’s output policy when it meets in Vienna next month, the country’s oil minister said on Sunday.
When asked if there is too much crude supply in the market, Algeria’s Energy and Mines Minister Youcef Yousfi said: “I don’t think so.”……………………………………….Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

Oil supplies and prices are expected to remain stable, Nigeria’s energy minister said on Sunday, adding that supply from the country would increase as its security improved.
Nigerian energy minister Diezani Alison-Madueke told reporters on the sidelines of the Gas Exporting Countries Forum (GECF) event in Qatar that Nigera was currently producing 2.4 million barrels per day of oil………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

The International Energy Agency (IEA) has warned oil could hit $150 a barrel in the coming years if investment slows in the Middle East.
North Sea Brent crude oil futures have averaged over $100 per barrel throughout 2011 as factors such as the Libyan conflict and the slowdown in the global economy exert short-term pressure on prices………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

Oman has joined the Gas Exporting Countries Forum, an intergovernmental organization of the world’s leading gas exporters, following a decision made at the forum’s ministerial meeting, Russian Energy Minister Sergei Shmatko said on Sunday.
“Today a decision has been made on admitting Oman to the organization. Requests for admission from several other countries are currently under consideration,” Shmatko said………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

Not known for alarmism and sometimes criticized for being too optimistic, the International Energy Agency (IEA) has warned that without bold action in the next five years the world will lock itself into high-emissions energy sources that will push climate change beyond the 2 degrees Celsius considered relatively ’safe’ by many scientists and officials.
“As each year passes without clear signals to drive investment in clean energy, the ‘lock-in’ of high-carbon infrastructure is making it harder and more expensive to meet our energy security and climate goals,” says Fatih Birol, IEA Chief Economist………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

Gone are the days when carbon trade was seen as a vital policy tool to cut emissions at the cheapest cost, and not many people talk about its prospects for overtaking the oil market in terms of traded value anymore.
Its reputation has been battered by a €50 million, or $69 million, scandal over permit thefts and a €5 billion fraud in the European Union’s emissions trading program, the world’s largest………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

The Emissions Trading Scheme tax developed by the European Union places a disproportionate burden on the aviation industry, which has done more to reduce fuel burn and improve environmental performance over the last decade than any other form of transportation.
Dwarfed by the auto industry, the taxes proposed for aviation by the EU represent a significant burden that, even with an offer to reduce initial years by 85 per cent, represent a foothold by politicians into a new revenue stream, which inevitably will be fully utilised………………………………………..Full Article: Source

Posted on 14 November 2011 by VRS |  Email |Print

What is clear is that the current market environment requires new strategies and a new approach to investing. The world is not in a happy place whichever way you look at it. Investing in these times means forecasting the road ahead as best you can - ensuring that potholes in your investment portfolio don’t turn into craters.
Over the past year, the consumer discretionary sector has sold off by some 18%, the materials sector is down 14%, A-REITS have fallen by 3%, the financials sector is 6% under and industrial stocks are down 10%………………………………………..Full Article: Source

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