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Commodities Briefing 25.Nov 2011

Posted on 25 November 2011 by VRS |  Email |Print

Justin PearsonThe world’s biggest investment banks have greater staff turnover in commodities than in fixed-income and currencies because of tightening regulations on trading, according to Coalition, a London-based research company.

That reflects “general market confidence and demand from non-banking competitors including trading firms, which do not have the same levels of regulatory constraints,” Coalition said in an e-mail, without giving figures. Coalition, founded in 2002, uses company announcements, its own research, media articles and information from people in the market………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

Patricia MohrCanada’s major export commodities experienced further price declines in October thanks to ongoing European debt challenges and the failure of the U.S. Congressional Committee to agree on a deficit reduction package.

Scotiabank’s Commodity Price Index, which measures price trends in 32 of Canada’s major exports, lost further ground in October, declining 3.7%. The All Items Index has fallen 9.8% from its near-term peak in April. Yet this price correction remains mild compared with the Index’s 40% plunge in the second half of 2008………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

China imported commodities at much higher prices in the first 10 months of 2011, with the prices of crops, refined and crude oil imports jumping by more than 30% compared to the same period a year ago, the National Development and Reform Commission said.

Between January and October, China’s imported grain prices were up 47.9% year on year to $377.7 per ton, imported soybean prices were up 29.8% year on year to $573.9 per ton, imported cotton prices were up 61.7% year on year to $2,972 per ton, imported edible vegetable oil prices were up 38.4% year on year to $1,175 per ton, and imported sugar prices were up 35.4% year on year to $689.2 per ton, customs statistics show………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

Gold imports are likely to reach 1,000 tonne due to growing investment demand, while prices might touch USD 2,000 by March 2012 driven by global economic crisis, a senior SocotiaMocatta official said.

“Investor demand has compensated the decline in the jewellery consumption. The rising gold prices, which has boosted the investors appetite, may result in close to 1,000 tonne imports of the yellow metal,” Rajan Venkatesh, managing director, India bullion, SocotiaMocatta, part of the Bank of Nova Scotia, told reporters on the sidelines of FICCI ‘Gems and Jewellery Conference’ here………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

With the worsening Eurozone crisis and the failure of government to manage the U.S. debt responsibly, markets are fearful of a meltdown. Traders are driving prices down in the knowledge that many positions are geared [leveraged] and exposed to margin calls.
Other positions are protected by ‘stop loss’ instructions, so can be triggered by prices moving down through support levels. Potential buyers are in no hurry to enter the market, either because they feel there is further to fall or because the volumes dictating price moves are too thin to get the sort of positions they want. Overall, the investment climate is very wintery from the bottom of the financial structures right up to the markets themselves………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

Gold traders are more bullish after investors accumulated the biggest-ever hoard of the metal, with Europe’s deepening debt crisis driving them to protect their wealth with this year’s second-best performing commodity.

Eighteen of 26 surveyed by Bloomberg expect bullion to rise next week. Holdings in exchange-traded products backed by gold reached a record 2,350.8 metric tons on Nov. 23, now valued at $128.5 billion, according to data compiled by Bloomberg. Hedge funds and other speculators increased their net-long position, or bets on higher prices, for four weeks, the longest stretch since March, Commodity Futures Trading Commission data show………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

Gold may decline as investors seeking a protection of wealth during Europe’s sovereign-debt crisis turn to the dollar, curbing demand for the precious metal. Palladium dropped to a seven-week low.

Bullion for immediate delivery was little changed at $1,694.18 an ounce at 11:57 a.m. in Singapore, on course for a second weekly decline. February-delivery futures were also little changed at $1,697.90 on the Comex in New York, where floor trading was closed yesterday for the Thanksgiving holiday………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

Kazakhstan’s international energy image is now that of one of the world’s rising oil exporters, an extraordinary feat given that, two decades ago its hydrocarbon output was beyond insignificant when the USSR collapsed. The vast Central Asian nation, larger than Western Europe, has now quietly passed another energy milestone.

Kazakhstan produces 33 percent of world’s mined uranium, followed by Canada at 18 percent and Australia, with 11 percent of global output. Kazakhstan contains the world’s second-largest uranium reserves, estimated at 1.5 million tons. Until two years ago Kazakhstan was the world’s No. 3 uranium miner, following Australia and Canada………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

World oil prices turned higher in Asian trade Thursday on stronger US energy demand and as investors abandoned equities markets for crude, analysts said. New York’s main contract for January delivery gained 24 cents to $96.41 per barrel while Brent North Sea crude for delivery in January advanced 60 cents to $107.62.

The oil market was buoyed by the weekly US inventory report, which showed a larger-than-expected drawdown last week, said Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

Oil prices remain largely range-bound with the tug-of-war between solid fundamentals and faltering macroeconomic picture continuing. January Brent slipped by $2.01 to $107.02/bbl, while the equivalent WTI contract fell by $1.84 to $96.17/bbl, said Barclays Capital in a Briefing.

Though prices have recovered somewhat on Thursday, the pressure from uncertainty concerning the euro area, China and global growth in general is likely to weigh on prices. The key fundamental data release on Wednesday was the US weekly oil data release, which showed a sharp tightening in the crude market………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will boost shipments by 1.9 percent up to the middle of December as refiners replenish crude inventories before demand for winter fuels peaks, according to tanker- tracker Oil Movements.

OPEC will export 23.52 million barrels a day in the four weeks to Dec. 10, up from the 23.09 million barrels shipped daily in the month to Nov. 12, the Halifax, England-based researcher said today in an e-mailed report. The figures exclude Ecuador and Angola………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

The high oil price could “strangle” efforts to get the global economy back on its feet and may also hamper Asia’s ability to help the West exit its crisis, the International Energy Agency’s chief economist said on Thursday.

The IEA’s Fatih Birol said the world economy was in a more fragile state now than during the crisis of 2008-2009, when oil prices were lower………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

As more countries move to block the importing of oil from Iran, the International Energy Agency’s Chief Economist, Dr. Fatih Birol says Governments are not seeing the bigger picture.

In presenting the Agency’s World Energy Outlook on Thursday, Dr. Birol explained that bans can lead to under-investment in production allowing the country to meet demand a cycle of damage that the world cannot afford would begin. In spite of this, the IEA presented a rather predictable future………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

JP Morgan has dramatically boosted its influence in the battle to acquire the London Metal Exchange by increasing its stake this week to become the biggest shareholder.

JP Morgan Chase now has stronger input into any changes proposed by suitors while making a tidy profit from any sale, but retains the option to team up with others to block a takeover, analysts and industry sources said………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

China’s government on Thursday said it has increased scrutiny of trading houses, and that exchanges set up without Beijing’s approval will be banned from trading derivatives and other financial products.

The number of outfits trading commodities, artifacts, precious metals, and other items has grown in tandem with the rise in the number of wealthy people in recent years. In the January-October period, 58 trading houses were established, the state-run China Daily newspaper said Thursday………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

China will ban trading of securities and futures on unauthorized exchanges to regulate the market and prevent financial risks, the State Council said.

Some of the trading activities have led to price manipulation and fund embezzlement by the exchange managers, China’s cabinet said in a statement dated yesterday. Such problems may cause regional financial risks and endanger social stability, the statement said………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

The defining moment was the fiasco over Wednesday’s bund auction, reinforced on Thursday by the spectacle of German sovereign bond yields rising above those of the UK.

If you are tempted to think this another vote of confidence by international investors in the UK, don’t. It’s actually got virtually nothing to do with us. Nor in truth does it have much to do with the idea that Germany will eventually get saddled with liability for periphery nation debts, thereby undermining its own creditworthiness………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

The Australian, Canadian and New Zealand Dollars – the so-called “commodity bloc” – have been the worst performers against their US namesake among the majors so far this year.
The outcome reflects the group’s sensitivity to global economic growth expectations and investors’ risk appetite at a time when the post-2008 crisis faces its most considerable headwinds yet, with output expansion increasingly expected to slow worldwide while the Euro Zone sovereign debt crisis threatens to unleash another credit disaster onto financial markets………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

The result of headless-chicken financial markets or a canary in the coal mine? India is grappling with this question. On November 22nd the rupee fell to an all-time low against the dollar. The speed of the rout (see chart) has been scary for a place that was supposed to be largely insulated from the rich world’s troubles. It is 20 years since India had a balance-of-payments crisis and for a long time the talk has been about it becoming an economic superpower.
But there lingers a memory of when it felt it was a financial hostage to the world, and this helps explain the whiff of panic now in the air. Mumbai’s financial types say that firms are scrambling to find dollars and that desperate euro-zone banks, which supply about half of India’s foreign loans, are cutting off credit lines………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

The GCC should accelerate its efforts to introduce a single currency. Sceptics may draw parallels to what is happening to the euro, which may further delay the process, especially in a region where implementation of almost anything has never been on time.

People need to realise that Gulf countries are different from the euro zone ones. In addition to commonalities in religious, cultural and social preferences, the $1 trillion bloc has a common denominator driving its individual economies………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

EU carbon fell 9 percent to an all-time low of 7.68 euros on Thursday on eroding faith in Europe’s economy, growing permit supply and a bout of automatic selling. EU Allowances for December delivery rose to 8.59 euros this morning before crashing down to the intraday bottom shortly before the Netherlands announced it had auctioned 2 million permits at 8.05 euros, further stoking the already oversupplied market.

The bellwether futures recovered somewhat in afternoon trade, climbing back to 7.87 euros by 1616 GMT, 57 cents below Wednesday’s settlement………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

The European Union’s emissions trading scheme now needs rescuing, but only on new terms which better address its main aims and eradicate some of its failings, using a price floor. The scheme, launched in 2005, is at a cross-roads, as carbon prices plunge to record lows and the fact dawns on traders that there may be no strong recovery for more than a decade.

The EU carbon market is now irrelevant as an environmental policy but a price floor would reverse that, and could deliver additional tens of billions of euros to member states through 2020 from extra auction revenues………………………………………Full Article: Source

Posted on 25 November 2011 by VRS |  Email |Print

The slide in European Union carbon permits to their lowest level since 2007 is underlining how the region’s sovereign-debt crisis is hurting industrial production.

The December 2011 contract sank 6.5 percent today after dropping 7.3 percent yesterday, the biggest price decline in five months. European manufacturing shrank this month, London- based Markit Economics said yesterday. An EU statistics office report showed industrial orders fell 6.4 percent in September, the biggest drop in almost three years, signaling less need for fuels and, in turn, emission permits………………………………………Full Article: Source

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