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Commodities Briefing 22.Oct 2012

Posted on 22 October 2012 by VRS |  Email |Print

Hedge funds cut bullish commodity bets to the lowest since July as speculation that governments in China and Europe aren’t doing enough to boost growth drove prices to the biggest loss in five weeks.
Speculators reduced net-long positions across 18 U.S. futures and options by 4.4 percent to 1.18 million contracts in the week ended Oct. 16, the lowest since July 24, U.S. Commodity Futures Trading Commission data show. Gold bets slid 7 percent, the first decline since Aug. 14, and those in silver fell 5.8 percent, the first drop in 12 weeks………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

Hedge funds and other big speculators have cut their bullish bets on U.S. commodities to the lowest levels since the end of August, data showed on Friday, as global economic worries pushed prices off their peaks.
Funds have mostly bailed out of gold after bullion’s repeated failure in breaching the $1,800-an-ounce mark which market bulls say would presage a new record high. Agricultural markets have also seen reduced investor interest as the U.S. harvest waned, prompting funds to cut the “long” money they had put on for a continued rise in soybean and corn prices………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

Slowing economic growth in Asia is adding to uncertainty in the oil market, according to the executive director of the International Energy Agency. The world is becoming increasingly dependent on Asia to supply oil products, the IEA’s Maria van der Hoeven said.
The IEA has lowered its forecast for global demand growth for 2012 by 500,000 barrels a day, partly because of signs of slowing in China, the Paris-based agency said in its Medium Term Oil Market Report………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

Sudan is not expected to see any jump in oil production in the next five years despite intensified efforts by Khartoum to expand exploration per figures released this week by the West’s energy watchdog.
According to the ‘Medium-Term Oil Market Report 2012′ issued by the International Energy Agency (IEA), the East African nation will produce 70,000 oil barrels per day (bpd) this year which will jump to 90,000 bpd in 2014 and drop to 60,000 in 2017………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

In the later years of the 1980s, Iraq had a refining industry among the firsts in the region with a well-established contribution to the economic and technological advancement of the country.
But the years of wars and sanctions took their toll not only on the investment in the expansion of the industry but on the wellbeing of the then existing refineries and their ability to produce marketable products matching the evolution of specifications worldwide………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

Recent global warming news tells us that ice sheets retreating due to global warming often suddenly stabilise for “decades to centuries” no matter that the warming is still going on, scientists of the British Antarctic Survey and partner research institutions have found.
Current predictions of sea level rises to be expected on a given timescale with a given amount of global warming will need to be revised - downwards. Climate system stability is much higher than previously thought - or hoped by global warming hysterics………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

After QE1 and QE2, gold prices rallied for up to 50 trading days and by around 15%. If it repeated today, this would imply gold prices rising to $1,900/oz by the end of October, said Deutsche Bank, the Germany’s largest bank, in a weekly commodities report.
Global gold prices ended lower for the second week in a row. The most-active December gold contract on the Comex division of the New York Mercantile Exchange settled at $1,724 an ounce, down 2% on the week………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

‘Mr. Gold’ of the 1970s, Jim Sinclair, the one-time adviser to the Hunt Brothers who cornered the silver market then is flagging up an imminent change in the way the bullion banks manage their spreads, something he feels is inevitable from his own long experience of the business.
In his latest missive, Mr. Sinclair explains: ‘You must note how central banks are either buying or protecting their gold reserve positions now. This is total about face two years ago. There is another change coming which is a replacement monetary system and the need for some asset on central bank’s balance sheets to have positive value, especially in the USA. Soon all that is required is a change in spread management by the gold banks and you will have whatever price the gold banks want from $3,500 to $12,400.’……………………………………….Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

US manufacturing production shrank at its quickest pace in more than 3 years in August and US construction spending lowered in July by the greatest amount in a year, the disappointing ISM index and construction spending info had been released yesterday.
These kinds of reports fire up further hope for investors that Ben Bernanke will launch QE. Gold rose 4.5% in August and is now focusing on the $1,700 price level as soon as more, probably the most since January, on conjecture that the Federal Reserve will add to its $2.3 trillion bond buying plan. Traders are awaiting the important US employment info due on Friday for further signals around the poor well being of the US financial climate………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

Silver demand may be curbed by a reduction in demand from the solar panel industry, said HSBC Holdings plc (HSBC) in a commodity research note.
HSBC analysts cite a report in the Financial Times suggesting there is a global oversupply of solar panel production capacity, with an official with China’s National Development and Reform Commission suggesting much of the world’s global solar-panel manufacturing capacity may cease operations due to slower demand growth………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

We are seeing some healthy profit taking in precious metals after making an explosive breakout over the summer. Investment demand after QE3 is increasing as investors seek alternatives to fiat currencies which are being devalued by Central Banks all over the world.
We may see consolidation and volatility in the markets until after the U.S. Presidential Election, when most investors realize that not much will change. All over the world governments are looking to boost unhealthy economies and this will continue regardless of who is in office………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

Aluminum is lower for the year to date, said BNP Paribas in a commodity snippet. “We believe it will continue to be a struggle, even though producers are under severe stress,” stated Stephen Briggs, senior metals strategist at BNP Paribas.
He cited a Wood Mackenzie data showing the median smelter has been barely cash positive this year basis the LME price, although this has been alleviated by inflated premiums and the higher price in high-cost China………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

Copper traders who a week ago were the most bearish in four months are now the most bullish in a year after economic reports signalled accelerating growth from China to the U.S.
Seventeen analysts surveyed by Bloomberg said they expect prices to gain next week and four were bearish. A further three were neutral, making the proportion of bulls the highest since October 2011. They were the most negative since June 1 last week. Hedge funds’ bets on a rally are near the biggest in 14 months, U.S. Commodity Futures Trading Commission data show………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

The slick mechanised operations at the Piparwar open-cast mine in eastern India, an ugly gash in the landscape bigger than New York’s Central Park, could lead the casual observer to conclude that the country’s coal industry is on a roll.
Piparwar, run by the state miner, produces some of the lowest-cost coal in India, just what’s needed for a country struggling to get enough of the “black diamond” to fix a power crisis that recently plunged half a billion people into darkness and chokes economic growth………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

Investors will get a new sense of how Canadian miners are dealing with the wobbly commodities cycle this week when some key producers start to report quarterly results.
Companies due to report are Teck Resources Ltd., the country’s largest diversified miner; No. 1 fertilizer maker Potash Corp. of Saskatchewan Inc.; Goldcorp Inc., one of the world’s largest gold miners; and mid-tier gold miner Agnico-Eagle Mines Ltd………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

In order to curb free flow of contracts on exchange platform, the Forward Markets Commission (FMC) is planning to frame criteria for agri commodities for determining their launch on futures exchange. Confirming the development, the FMC chairman Ramesh Abhishek, said, “Criteria are being worked out which would determine whether commodities are fit for trading on futures exchanges or not.”
According to informed sources, the FMC would categorize all commodities currently being produced, consumed and traded in India. Beginning from the top, the proposed four categories would begin with the most popular – soya, bullion, base metals, steel and energy; and end with the least popular - region specific agri commodities including isabgul, funnel seed etc………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

Commodities financing has become the fastest growing business for Singapore bank DBS Group Holdings less than two years after it entered the segment, benefiting from the withdrawal of some European lenders in Asia, its CEO said.
Southeast Asia’s biggest and most profitable bank has built a nearly S$25 billion ($20.48 billion) loan book by funding the trade in products such as oil and coal, said chief executive Piyush Gupta. About 100 people work in the unit that provides trade finance as well as hedging and broking to clients………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

“It’s unavoidable” says Jim Rogers of a coming recession. He notes that roughly every four to six years has seen an economic slowdown in the U.S., and that 2013 and 2014 will be no exception to that rule. For months now, Rogers has been warning investors that our culminating debt issues and a sluggish economy will lead to a recession that is even worse than that of 2008.
He has continually told investors to be very worried and to prepare themselves, but unlike most others who predict a doomsday-like scenario, Rogers has given advice on how to prepare yourself……………………………………….Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

After weeks of capital inflows from abroad that have pushed up the value of the Hong Kong dollar to the top of its trading band, the city’s de facto central bank was forced to intervene Friday and weaken the local currency for the first time in nearly three years.
The U.S. Federal Reserve’s latest round of stimulus measures and the European Central Bank’s recent pledge to buy sovereign bonds has restored global investor confidence and led money managers to buy a wide range of assets around the world, including in Hong Kong………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

United Nations carbon offset contracts slumped to records after the European Union proposed to ban from its market certain credits issued from next year by countries that fail to adopt new carbon goals.
The European Commission, the EU’s regulatory arm, proposed draft rules for the use of UN-sponsored Emission Reduction offsets as of 2013 in a modified draft amendment to the bloc’s carbon registry regulation at a meeting of officials from national governments on Oct. 17, according to two people with knowledge of the matter, who declined to be identified because the gathering was private………………………………………..Full Article: Source

Posted on 22 October 2012 by VRS |  Email |Print

We can now see clearly that there will be an overall slowdown in global growth from 2012-13 that can be explained by many contributory factors ― it is by no means only because of the eurozone crisis.
While the International Monetary Fund until recently expected growth in global gross domestic product to come in at 3.9 percent in 2013 and 4.5 percent in 2014, global growth is in reality likely to remain between 2 and 2.5 percent for these two years. What factors can explain this prospect of weak global growth?……………………………………….Full Article: Source

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