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Commodities Briefing 01.Dec 2011

Posted on 01 December 2011 by VRS |  Email |Print

The global trade in agricultural commodities is expected to touch $ 217 billion by 2020, a agri-business consulting firm High Quest Partners said. “Agricultural commodities trade is forecast to reach 526 million tonnes by 2020 and will be worth $ 217 billion at current prices,” Blair Fortner, Director, at High Quest Partners, said.
He said commodities markets across the globe have entered a period of high and volatile prices………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

Hussein AllidinaCommodities show limited potential for gains in 2012 as the global economy slows and risk aversion boosts the dollar, according to Morgan Stanley.
A comprehensive solution to Europe’s debt crisis remains elusive, while economic indicators signal a slowdown and deleveraging and fiscal austerity should impair growth, providing a “myriad of headwinds” for expansion, said analysts led by Hussein Allidina in a report………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

Speculators are cutting their exposure to commodities to levels not seen since the recession of two years ago as fears grow of a global slump.
The US Commodity Futures Trading Commission (CFTC) reported that long positions across 18 key futures and options contracts fell 25% last week. That means the tally of outstanding positions is back where it was in July 2009 as investors liquidate their holdings………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

Commodity traders are cheering China’s rate cut today by buying up Nymex crude futures. That may be the wrong reaction. Nymex crude is up more than 1% to more than $100 a barrel, rallying along with energy and materials stocks (and industrials and everything else). After all, if China is now priming the liquidity pump along with every other central bank in the world, then why wouldn’t commodity prices rise?
It’s worth recalling, however, that central banks were priming the liquidity pump in 2008, too, but falling demand led to falling commodity prices. That may be a cautionary tale today………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

A lack of liquidity has dented European banks’ ability to fund commodity finance operations, and emerging market lenders have moved in to fill the gap, Bruce Tozer of Credit Agricole Corporate and Investment Bank said on Wednesday.
A reduction in interbank lending and new European Union capital requirement rules for banks from 2013, known as Basel III, were partly to blame for the lack of commodity trade finance in Europe, Tozer said………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

Commodity prices across the board moved higher Wednesday, with oil prices topping $100 per barrel for the second time in almost six months. And experts said this time they could actually keep climbing.
“We could look back at today and identify it as the catalyst that put a floor on commodity prices,” said Phil Flynn, senior market analyst PFG Best. Oil prices were up 57 cents, or 0.6%, at $100.36. Oil had surged nearly 2% at one point Wednesday. Crude prices finished above $100 a barrel earlier this month for the first time since May………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

Commodities rose to the highest in almost two weeks after the Federal Reserve cut the cost of emergency funding for banks in Europe as part of a global effort to stem the region’s sovereign-debt crisis.
The Standard & Poor’s GSCI index of 24 raw materials rose 0.7 percent to settle at 658.02 at 4:04 p.m. New York time. Earlier, the measure reached 664.56, the highest since Nov. 17. Industrial and precious metals led the rally. In the two weeks ended Nov. 25, the GSCI gauge dropped 4.5 percent as borrowing costs surged in Europe, imperiling the euro and banks………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

Following falls to what National Australia Bank saw as oversold levels in October, bulk commodity prices have partially recovered in recent weeks. The magnitude of the change in prices has been significant, NAB noting from a September peak the iron ore price declined by more than 35% to US$117 per tonne before subsequently rising by 25% over the following two weeks.
Prices have not fully bounced back to previous levels, something NAB suggests is a reflection of the market adjusting to an apparent slowdown in global demand and the increasingly uncertain global outlook………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

New Zealand’s commodity export prices fell for a sixth month in November, the longest stretch of declines since the economy contracted in 2008 and early 2009.
Prices fell 1 percent from October, according to an ANZ National Bank Ltd. index released in Wellington today. In New Zealand dollar terms, prices rose 1.2 percent………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

Oil production this month by the Organization of Petroleum Exporting Countries rose to the highest level in three years, led by surging Libyan output, a Bloomberg News survey showed.
Production increased 390,000 barrels, or 1.3 percent, to an average 30.355 million barrels a day from a revised 29.965 million, the most since November 2008, according to the survey of oil companies, producers and analysts. Daily output by the 11 members with quotas, all except Iraq, climbed 340,000 barrels to 27.65 million, 2.805 million barrels above their target………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

OPEC oil output has risen in November to a three-year high due to increased supplies from Angola and a further recovery in Libya’s production, a Reuters survey found on Tuesday.
Supply from all 12 members of the Organization of the Petroleum Exporting Countries is expected to average 30.27 million barrels per day (bpd) this month, up from a revised 29.81 million bpd in October, the survey of sources at oil companies, OPEC officials and analysts found………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

The shift in demand for energy from West to East shouldn’t undermine global energy security, the IEA executive director said from Saudi Arabia.
International Energy Agency Executive Director Maria Van der Hoeven, speaking at a petroleum studies research center in Riyadh, said shifts in energy demand shouldn’t put the global energy balance at risk………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

In a gesture of highlighting the glaring impediments and equally exciting opportunities facing the silver industry today, Sprott Asset Management CEO Eric Sprott issued a “A Call to Action” letter to 17 of the world’s largest silver producers, posted on one the world’s leading sources of breaking news in the bullion markets, King World News. Sign-up for my 100% FREE Alerts.
As a synopsis of the 1,876-word letter, Sprott outlines a compelling case for producers to hold back inventory for the sake of supercharging its balance sheets as well as maximizing future profits in the wake of drastically changed global market conditions from years past—namely, an environment, in which: ……………………………………….Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

Morgan Stanley said it prefers exposure to gold, silver and livestock in the coming year, as such commodities perform well in a global economic slowdown.
The bank’s economists expect global GDP to grow by a mere 3.5 percent in 2012, down from its prior forecast of 3.8 percent, with the first half of the year seen as particularly weak………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

Gold investors seem to be splitting into two camps at the moment, those that believe there is absolutely no future for the Euro and those that, while concerned remain hopeful that the world as we know it isn’t about to come crashing to an end.
UBS it seems falls into the latter category. In its Global Commodities Outlook report for 2012, the bank writes: “We expect the Eurozone crisis to intensify to the point of a ‘big bang’, namely only when the clear alternatives are breaking up the Eurozone or systemic collapse will EU politicians be compelled to accelerate fiscal convergence; that should ultimately change sentiment significantly.”……………………………………….Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

After Gold prices regained considerable ground and broke the $1800 barrier they have now slumped back to below $1700 following heightened Euro zone concern, a disappointing Spanish bond auction and record breaking yields in Italy, Spain and Belgium.
The auction saw the Spanish government pay 6.97% for £3.56 billion (a fraction of what it needed to raise) of 10 year Spanish bonds, up from 5.43% when they last auctioned 10 year bonds in October………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

Jim Rogers once again affirmed his love of Gold and indicated that if prices drop to $1200/oz, he would get extremely excited. In a recent interview with CNBC, Rogers says, “Somewhere down the line gold will have a correction. Gold will continue to do what gold does best. Just give it a chance. I own gold and I’m not selling my gold”
He stated that if he had to buy a precious metal today, he would consider Silver since it is 40% below its high whereas Gold is trading just 20% off its highs………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

While massive amounts of money have been flowing into the mining sector and into mineral commodities, those funds have not necessarily come from equity markets, mining financing experts observed Tuesday at the Northwest Mining Association Conference in Reno.
Doug Silver of Red Kite Management, a metals trader, observed, “You can’t raise equity right now” with a U.S. Congress in gridlock, China’s projected growth numbers leveling, and the possibility the Eurozone could fall apart………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

On the heels of our popular “Eleven For ‘11” series that we ran late last year, we’re upping the ante by one this time around. No, it’s not the 12 days of Christmas, though some might say it is a 12-round title fight. We’re talking about looking at 12 ETFs across various that merit consideration for 2012 and we’re getting the ball rolling with some beta by looking at commodities funds.
Always volatile, sometimes controversial, commodities have taken on a new role in the lexicon of ordinary investors thanks in large part to the evolution of the ETF industry. But those that end the discussion with gold and oil funds are missing out because there are many more potentially profitable opportunities for the taking in the commodities world………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

Most avid market followers know that the risk on trade has been off for a while now, but with news today that global central banks are looking to boost liquidity in international financial markets, better days may be on the horizon for commodities and we’re not just talking gold and oil.
Commodities of all stripes benefited from the Federal Reserve’s second round of quantitative easing in 2010 and if the Fed, European Central Bank, Bank of Japan and others travel down QE Boulevard again this year and into 2012, taking a look at some oversold commodities exchange-traded products right now might be a pretty good idea………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

Morningstar analyst Lee Davidson has launched a Morningstar ETF Research report on RBS Market Access Rogers International Commodity Index ETF, which offers broad commodity exposure by tracking the Rogers International Commodity Index (RICI) covering 38 commodities in the energy, agriculture, and metals subsectors.
Davidson writes that, historically, commodities have been sought out by investors to increase their risk-adjusted returns given their low to negative correlation with equities and fixed income securities………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

Most currencies of emerging economies held on to their sharp rise against the dollar Wednesday, making market participants wonder if the rally would hold or fade on the next scare.
The South African rand and the Mexican peso, both used as proxies for risk, at one point surged more than 2% against the dollar, indicative of a strong recovery in investors’ risk appetite………………………………………..Full Article: Source

Posted on 01 December 2011 by VRS |  Email |Print

The yen was 0.4 percent from a two- week low against the euro as Asian stocks extended a global equity rally, curbing demand for haven assets.
Japan’s currency fell yesterday after six central banks led by the Federal Reserve acted to lower the cost of borrowing dollars for banks. The dollar maintained its biggest slide in three weeks versus the euro before reports forecast to show manufacturing in the U.S. expanded and employers added more jobs last month………………………………………..Full Article: Source

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