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Commodities Briefing 21.Dec 2012

Posted on 21 December 2012 by VRS |  Email |Print

Two centuries of independence for the New York Stock Exchange are set to come to an end after its operator, NYSE Euronext, agreed to sell itself to Inter-continentalExchange, the commodities-focused markets business, in an $8bn (£5bn) deal.
In all, the combined stock market behemoth will own 14 exchanges, along with five clearing houses, giving ICE the heft to go head to head with larger rivals such as CME, which runs derivatives and futures exchanges in New York and Chicago, and the Frankfurt-based Deutsche Börse, whose own gambit to join forces with NYSE Euronext was thwarted by European competition regulators………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

Commodities are on track to halt four years of consecutive gains, despite large bets in related funds. The S&P Goldman Sachs Commodity Index is down 0.03 percent this year, on track for its first annual loss since 2008, when it fell 43 percent.
At the same time, money invested in commodity funds is up 86 percent to $20.8 billion compared to 2011, according to data by EPFR Global. Gold is the big winner in 2012, with nearly 84 percent of the funds invested in physical commodities ($16.7 billion) going towards the metal. Gold has gone up in price for 12 consecutive years, up about 500 percent in that period………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

Hedge funds owned by commodity giants including Cargill and Louis Dreyfus have outwitted their standalone rivals in a year of market volatility that has disrupted traditional models for oil and metals trading.
They have used their knowledge of agricultural markets to trade products that have been less affected by central bank liquidity injections or heightened tensions in the Middle East as many other funds have had their worst year in a decade………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

Commodity prices are poised for a rebound in 2013 following the declines experienced in many of Canada’s resource sectors this year despite a summer rally, according to a new report from Scotiabank. In a commentary accompanying its Commodity Price Index for November, Scotiabank says prices will get a lift as buyers restock raw materials after liquidating inventories or deferring orders in 2012.
“This is already the case in China, where a pickup in orders from steel producers, after a sharp inventory correction last summer, has boosted spot iron ore and coking coal prices,” writes Scotiabank commodity market specialist Patricia Mohr………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

A new online report from McKinsey & Company claims that commodities prices are destined to rise higher and become more volatile as demand from emerging markets comes more prominently into play.
According to the report the economic growth of emerging markets will lead to prodigious gains in demand for resources, with growth in demand for energy and steel projected to rise 33% and 80% for the period from 2010 to 2030………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

Changing global climate has wrought havoc on the agricultural sector during the past year. Drought in the United States has stunted the yields of many crops, while unusual weather patterns elsewhere in the world led to sharp spikes — and drops — in farm yields across Asia, Latin America and Europe.
Yet it’s unwise to pay too close attention to these near-term events. Instead, focus on the clear long-term trend in place for global agriculture. Millions more people are joining the middle class in fast-growing places such as China, Brazil and India, and there is a global push to ensure crop yields are maximized to meet this rising demand………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

Slow economic growth and ample supplies are expected to keep a lid on oil next year with crude prices gradually slipping lower. But analysts polled by Reuters say a price crash is unlikely and geopolitical concerns should help support the market.
Reuters monthly survey of 26 analysts forecast North Sea Brent crude oil will average $108 per barrel in 2013, down from an average of $111.71 so far this year. Brent prices are projected to fall further to an average of $105.90 in 2014, the poll showed………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

The contrarian walled deep inside newsletter land might want to sell people on the idea that oil prices, trading sideways all year, are heading to the vicinity of 50 bucks a barrel. But the smart money thinks otherwise.
Barring a complete crack up of the eurozone, a China hard landing, and a U.S. recession due to failure in the fiscal cliff talks, oil will likely be another boring commodity in 2013………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will cut crude exports by 2.6 percent as demand during the northern hemisphere winter begins to slacken, according to tanker tracker Oil Movements.
The group that supplies about 40 percent of the world’s oil will export 24.1 million barrels a day in the four weeks to Jan. 5, down 640,000 barrels a day from the previous period, the researcher said in an e-mailed report today. The figures exclude Angola and Ecuador………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

The interminable budget talks in Washington are causing oil prices to fluctuate this week and oil future contracts are trading lower Thursday morning as fiscal cliff negotiations stall. On Wednesday oil prices were headed higher after government data showed a decline in weekly inventories.
Andrew Lebow, senior vice president of energy derivatives at Jefferies Bache, tells The Daily Ticker that he’s “bearish” on oil prices because supplies will exceed demand in the U.S. and globally next year. He lowered his estimated trading range to $75 to $100 per barrel from roughly $77 to $110 this year………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

Looking back on 2012, it is hard to discern the biggest story in the oil and gas sector. The reshuffling of assets is certainly a contender, as is the huge growth in U.S. oil production. Here at 24/7 Wall Street, we want to see how the old year might tell us something about the coming year.
Major oil and gas companies spent quite a lot of effort shedding assets for one reason or another. BP PLC has parted with $32 billion in assets as it builds a cash reserve of $38 billion to pay claims resulting from the sinking of the Deepwater Horizon and the deaths of 11 workers in the disaster………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

Gold is the favoured commodity of 2013 with more than 80% of gold executives expecting to see a rise in the price of gold, which will drive increased spending on exploration and merger and acquisitions says the latest PricewaterhouseCoopers (PwC) Gold Price Report released Thursday.
After analyzing the 46 largest Toronto-listed gold mining companies, the firm found that more than 20 of these miners have cash reserves greater than $500 million………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

Gold prices have advanced every year in the last decade and are poised for their 11th straight year of gains in 2012. Next year, gold prices could reach $2,000 an ounce for the first time ever.
As we look forward to 2013 and beyond, I see signs that gold and the entire precious metals complex will remain key components in portfolios of small and large investors alike. Rising volume and open interest on the futures exchanges, ETF markets and over the counter physical market continue to indicate that investment demand for precious metals has never been greater………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

Markets are made of opinions, some better than others.There are always plenty of opinions about gold. And right now they’re clearly making the market. Just not in the way you would think. “There are too many bulls, including me,” warned hedge-fund and commodities legend Jim Rogers to CNBC overnight. He advises caution if you’re buying gold on this drop. Unlike most everyone else.
Swiss bank UBS last week kept its 2013 forecast for gold to average $1900 per ounce – a rise of 14% from the 2012 average so far – while fellow London market-maker Barclays now sees gold averaging $1815 next year, a snip off its previous 2013 forecast………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

With gold prices being hammered in recent weeks, and trading near four-month lows on Wednesday, longtime gold bull Jim Rogers is sounding a word of caution, saying it’s possible the correction in bullion may continue into the new year.
“Just be careful, there’re too many bulls, including me, but I’m very cautious,” Rogers told CNBC. “Gold is having a correction- it’s been correcting for 15-16 months now- which is normal in my view, and it’s possible that [the] correction is going to continue for a while longer.”……………………………………….Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

As the year draws to a close it would appear that very few of the more than 100 of you who entered this year’s Mineweb gold price competition have come anywhere near close to the reality.
Readers are obviously, for the most part, a pretty bullish community as far as precious metals are concerned, and although in past years average predictions have actually been pretty good given the gold price’s good annual rises year on year, the yellow metal’s 2012 performance has not (barring a huge jump in the last week of the year) come up to readers’ expectations – or anywhere near………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

Prices again crept gradually higher in Asian trading prior to some retrenchment in early European trading but dollar weakness was supporting gold and silver. Further weakness could be seen and it is worth noting that gold and silver saw considerable weakness last December and both bottomed near year end on December 29th prior to strong gains in January 2012.
Support for silver is at $30.67/oz and $30/oz. Gold’s support is at $1,647/oz and below that at $1,600/oz………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

The 56 per cent rebound in iron ore prices since the lows of early September has arrived too late to save Labor’s promise to deliver a budget surplus this financial year.
But of more interest here is whether the rapid rebound in prices for the nation’s biggest export earner is going to save us from the seemingly necessary but thoroughly boring approach of the big miners BHP Billiton and Rio Tinto to the coming year — one of capital discipline and cost-cutting………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

The mining sector encompasses the extraction (mining) as well as primary and secondary processing of metals and minerals. It includes producers of aluminum, gold, steel, precious metals and minerals, and diversified metals and minerals. The sector is highly cyclical and extremely competitive.
Though industrial mining is back on track after a decade given strong growth in emerging markets, in particular China and India, shaky domestic growth, still depressed job numbers and unresolved European problems keep the performance in check……………………………………….Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

The Tokyo Commodity Exchange, Inc. (TOCOM) and Nikkei Inc. announced today a name change of the Nikkei-TOCOM Commodity Index as of February 12, 2013. This change only applies to the Japanese language name. The two companies have been jointly calculating and publishing the index since 2009.
This coincides with TOCOM’s Japanese-language name, which is scheduled to be updated on February 12 with the launch of Agricultural Product and Sugar Market (pending regulatory approval). TOCOM’s corporate name and the names of the indexes in English will remain unchanged………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

Emerging-market currencies could go from this year’s laggards to next year’s outperformers, investors and analysts say. Most currencies from the developing world rose slightly against the dollar in 2012, but couldn’t compete with returns from emerging-market dollar-denominated debt.
The MSCI EM Currency (USD) index is up about 5% year-to-date, while emerging-market sovereign dollar-denominated debt has soared to see total returns of 18%, according to a Barclays index………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

It’s forecast season again, and the currency strategists are hunched over their crystal balls and chart, busily producing their best calls for 2013.
At Wells Fargo, one group of currencies in favor for the new year is what they call the ‘nifty NAFTA.’ The strategists, led by Nick Bennenbroek, say the Canadian dollar and Mexican peso are poised to outperform other risk-sensitive currencies like the Australian and New Zealand dollars………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

It is not expected that a unified global carbon trading market will be established until at least 2020. Although Europe has an active trading market, international agreement to establish a single global trading scheme will be dependent on the establishment of a US Federal trading system.
A global market is dependent on domestic climate change action by the US at a federal level. At the moment this seems unlikely in the near future. As a preferred route, countries are developing their own markets and are trading between countries………………………………………..Full Article: Source

Posted on 21 December 2012 by VRS |  Email |Print

Europe’s carbon market is set to lose a third of its value this year as an oversupply of permits worsened, battering average prices and increasing pressure on European governments to provide support.
The world’s biggest carbon scheme, the European Union’s Emissions Trading System (ETS), was valued at a record $148 billion last year by The World Bank but analysts say that is likely to have fallen to around $100 billion, a level not seen since 2008………………………………………..Full Article: Source

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