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Commodities Briefing 02.Nov 2012

Posted on 02 November 2012 by VRS |  Email |Print

Slumping energy and metal prices sent commodities to their biggest monthly loss since May, lagging behind stocks, bonds and the dollar, as the global economy grew at the slowest pace since the 2009 recession.
The Standard & Poor’s GSCI Total Return Index of 24 raw materials fell 4.1%, erasing gains for the year. The MSCI All-Country World Index of stocks slid 0.6%, including dividends, while the US Dollar Index slid 0.02%. Bonds of all types gave positive returns, according to Bank of America Merrill Lynch’s Global Broad Market Index………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

The commodity markets were intended to help agricultural producers manage risk and find buyers for their products. The stock and bond markets were intended to create an incentive for investors to finance companies. Speculation emerged in all of these markets almost immediately, but it was not their primary purpose.
Hedging involves taking an offsetting position in a derivative in order to balance any gains and losses to the underlying asset. Hedging attempts to eliminate the volatility associated with the price of an asset by taking offsetting positions contrary to what the investor currently has. The main purpose of speculation, on the other hand, is to profit from betting on the direction in which an asset will be moving. Speculators make bets or guesses on where they believe the market is headed………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

Australia’s export commodity prices fell to a two-year low in October according to Reserve Bank of Australia (RBA) figures. The RBA’s index of commodity prices in October was 3.5 per cent lower in foreign currency terms compared with September, and down by 19.5 per cent from its peak in July last year.
The October level was the lowest for the index since October 2010. The index is now less than one per cent above the high point seen in September 2008, just ahead of the descent of global financial markets into crisis and consequently the slump in commodity prices that bottomed out in May 2009………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

One of the wealthiest countries in the world, and the richest in Asia in GDP per capita terms, Australia is an unusual mix of a modern market economy with a large commodities-driven export infrastructure. Despite the influx of wealth created by its natural resources, Australia has never been particularly successful in developing a large manufacturing base.
What’s more, the country has run large and persistent current account deficits for over a half-century. Nevertheless, Australia has very significant and efficient mining and agricultural sectors, and ranks highly in the world in many categories………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

Different segments of the commodities market will have mixed performances in the near term, says Société Générale which is bearish on energy and bullish on precious metals. Agricultural products and base metals are believed to trade mostly sideways, with some upside potential for base metals in the medium term, it forecasts.
Its Analysts suggest, however, that retail investors should again begin to consider equity funds with a wide exposure to commodities futures. Currently, fund flows are overweight in bond funds, given the low interest rate environment and a pessimistic outlook on the equity market………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

Hedge funds reduced bullish oil bets to the lowest level in almost three months as futures declined and U.S. crude stockpiles increased.
Money managers slashed wagers on rising prices for the fourth time in five weeks, cutting net-long positions by 17 percent in the seven days ended Oct. 23, the Commodity Futures Trading Commission’s Commitments of Traders report on Oct. 26 showed. It was the least since the week ended July 31………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

OPEC will boost crude shipments to their highest level in more than six months as demand for heating fuels in the Northern Hemisphere picks up with the arrival of winter, according to Oil Movements.
The Organization of Petroleum Exporting Countries will increase exports by 390,000 barrels a day, or 1.6 percent, to 24.13 million a day in the four weeks to Nov. 17, compared with a month earlier, the tanker-tracker said today in a report. It’s the biggest rise and highest level since late April, according to the researcher. The data exclude Angola and Ecuador………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

Africa’s top oil producer Nigeria is concerned that oil and gas prices could fall as more countries uncover reserves and sees the need to make plans to adapt to this new environment, its finance minister said on Thursday.
“We are worried, we are concerned, because obviously so many countries are discovering oil and gas so the supply will be increasing over the next few years and therefore we need to plan accordingly to make sure we have the necessary buffers in our own economy,” Ngozi Okonjo-Iweala told reporters………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

Gold traders are the most bullish in 10 weeks and investors are hoarding a record amount of bullion as central banks pledge to do more to spur economic growth.
Eighteen of 27 analysts surveyed by Bloomberg expect prices to rise next week and five were bearish. A further four were neutral, making the proportion of bulls the highest since Aug. 24. Holdings in gold-backed exchange-traded products gained the past three months, the best run since August 2011, data compiled by Bloomberg show. They reached a record 2,588.2 metric tons on Oct. 31, valued at $143 billion, the data show………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

October tends to be a seasonally negative month for gold but November a seasonally bullish one, said Zurich based Investment Bank UBS in a snippet. December gold last traded up $8.00 at $1,720.00 an ounce on the Comex division of the New York Mercantile Exchange. Spot gold was last quoted up $10.90 at $1,720.50.
“Monthly returns since the mid-1970s show an average gain of about 1.4% in November, the second strongest month in terms of seasonality,” the bank added………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

Gold looks really vulnerable and could be heading for a crash if it breaks the $1700 support level, according to Denis Gartman, Editor of Gartman Letter.
Many analysts are bullish on gold on wrong reasons, money supply (M1, M2) is expanding but a more crucial variable, the Adjusted Monetary Base of US Federal Reserve remains sideways for the past 14 months, he said………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

If asked to name the top performing commodity of the past decade, not many would answer silver because of its notorious volatility.
Yet, according to Lloyds TSB, silver prices have delivered the best gains since 2002. Lloyds data shows that the shiny metal soared 572% over the past decade, beating gold’s rise of 428%, which was second best among commodities………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

The gold price is down almost $100 and silver has shed a couple of dollars an ounce. That is bad news if you have just bought gold and silver. But if you have bought and hold for the past few years you would know it is only what to expect from these precious metals.
Price volatility is a price worth paying. Over the past five years the silver price has dropped suddenly by 60% and rebounded to twice the price of silver at the outset. The gold price has been less dramatic but still ranged in huge 30% price swings………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

Over the past decade, Exchange Traded Funds (ETFs) have gained tremendous popularity due to many advantages and flexibility that they offer investors. Some of the factors point to tax efficiency when compared to mutual funds, cost effectiveness and transparency as well as entry and exit flexibility.
Clearly investors have embraced these factors as total ETF industry assets currently stands at $1.3 trillion after 34% year on year growth as of 30 th September 2012 (as published by the ETF Industry Association )………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

The Royal Bank of Scotland (RBS), the issuer behind the Trendpilot series of ETNs, is nearing launch of five new ETNs, all based on renowned commodities guru Jim Rogers’ Enhanced Rogers International Commodity Index (RICI) series.
Aside from a broad commodity ETN based on Rogers’ flagship-enhanced RICI index, the four other ETNs will track RICI subindexes focused on agriculture, energy, precious metals and industrial metals. Jim Rogers’ fans should be excited. After all, Rogers is to commodities what Bill Gross is to fixed income. ……………………………………….Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry commodities, fell on Thursday as capesize rates weakened for the third straight day.
The overall index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, fell 2.53 percent to 1,000 points. The Baltic’s capesize index fell 2.65 percent to 2,355 points………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

A majority of the Commodity Futures Trading Commission supports appealing a judge’s ruling against limits on commodity-market speculation, Commissioner Mark Wetjen said on Thursday.
The five-member commission approved position limits last year to cut down on excessive speculation in commodity markets. The rules limit the number of contracts traders can hold in 28-commodities, including oil, coffee and gold………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

Glencore International PLC, one of the biggest traders in raw materials like metals and coal, saw its production levels rise in the third quarter despite a drop in the price of many commodities.
The Swiss-based commodities giant — whose production reports serve as a global snapshot of the supply and demand for commercial materials — reported Thursday that business during the third quarter was “good, despite generally weaker commodities prices.”……………………………………….Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

Investment flows into commodities expanded to US$7.3 billion in September, showing the most monthly growth since July 2011, Barclays Capital said on Thursday.
“September marked the fourth consecutive month of inflows, helping to take the total Q3 inflow to US$13 billion and more than making up for the US$5 billion of outflows in Q2,” Barclays said in a note to clients………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

The yen sagged to near a four month-low on Friday while commodity currencies held solid gains as investors bet on an upbeat U.S. payrolls report after private employers added jobs at the fastest pace in eight months.
The euro was under pressure after a Greek court ruled the country’s pension reform demanded by foreign lenders may be unconstitutional, raising concerns about Athens’ ability to implement austerity measures needed to secure bailout money……………………………………….Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

Don’t look now, but China may be stepping away from its practice of controlling the level of the yuan. China’s currency policies may be a hot topic for Governor Mitt Romney in the Presidential election, but beneath the surface, all the bluster may be for naught.
That’s the takeaway from a new analysis by Simon Derrick, chief currency strategist at Bank of New York Mellon. Derrick notes that China’s reserve growth has essentially stalled………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

China’s growing influence in the grain and oilseed market has been well covered in recent years, with the country’s increasing share of global corn, soybeans and (recently) wheat trade exhaustively scrutinized by market trackers.
But less well publicized has been China’s emerging dominance in the rice market, brought about by soaring domestic prices which sparked a wave of import buying lately that has catapulted China from seventh to second in the world rice import rankings and altered the trade flow across Asia of one of the world’s most popular dietary staples………………………………………..Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

The major investment banks remain heavily engaged in the energy markets, hedging fuel prices and even producing energy for their own or their clients’ benefit. But Brad Hintz, a Sanford C. Bernstein & Co. research analyst who tracks the investment banking and securities industries, told AOL Energy that the big banks are also positioning themselves for potential regulatory changes which will force the launch of a national carbon-trading market.
“Goldman Sachs, JP Morgan, Morgan Stanley, and Barclays are all major energy traders,” Hintz observed. “They are the banking giants in that space, and they – along with the commodities exchanges – provide the risk management services needed to balance demand and supply in the global energy markets.”……………………………………….Full Article: Source

Posted on 02 November 2012 by VRS |  Email |Print

A Taiwan-UK forum on low-carbon and sustainable development opened yesterday with the aim of sharing the UK’s experience in the development of low-carbon cities and exploring future bilateral business opportunities.
Hosted by the Environmental Protection Administration (EPA) and the British Trade and Cultural Office (BTCO), the Low-Carbon and Sustainable City Forum offers a platform for participants to discuss future trends and how businesses can benefit from the global low-carbon trend, the organizers said………………………………………..Full Article: Source

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