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Commodities Briefing 02.Jan 2013

Posted on 02 January 2013 by VRS |  Email |Print

Wheat and soybean futures edged lower on Monday, but ended the year as the best performers in a basket of commodities, including crude oil, as demand lifted prices and the worst drought in half a century crimped supplies.
Wheat posted the biggest gain this year among the 19 commodities in the Thomson Reuters-Jefferies CRB index, soaring 19.2% despite falling for three straight months and tumbling 7.9% in December alone………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

Most markets were very good to bulls this year. Soft commodities, however, were a painful exception. In a sharp shift from the supply concerns of 2011 that had lifted prices of raw sugar, cotton and arabica coffee to multi-year highs, overstock was king in 2012.
Futures of arabica coffee, the world’s most widely consumed variety, plunged nearly 37% – one of the steepest declines across commodity markets – on ICE Futures U.S. this year. The culprit: big production………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

At the end of this month we’ll be releasing our 2013 outlook piece — The Bespoke Report — which will have a section on commodities as usual. Below is a chart highlighting the year-to-date performance of ten widely followed commodities.
As shown, three of the ten commodities in the chart are down in 2012, while seven are up. Corn has posted the biggest gain in 2012 at 17.33%, which isn’t that much for the top performer relative to some of the huge gains for commodities that we’ve seen in recent years………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

Another year has come to an end, and another 12-month stretch of frantic commodity trading can go in the books. As is par for the course, this year saw a number of big movers throughout the space, as these assets maintained their reputation for general volatility.
This year saw its share of winners and losers, as a number of macroeconomic factors combined to guide the commodity space to the finish line. Below, we outline the five commodities that outperformed their competition in 2012………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

Coffee prices have fallen more than 50% since 2010 which can be seen through the coffee exchange traded fund symbol: JO. This investment seeks to replicate the returns that are potentially available through an unleveraged investment in coffee futures contracts as well as the rate of interest that could be earned on cash collateral invested in specified Treasury Bills.
The top weekly chart shows my price targets for 2013 while the lower hourly chart shows strong on balance volume meaning big money is slowly building a long position in coffee………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

It may be America’s largest waterway, but now even the mighty Mississippi is being choked by drought, as historically low water levels threaten to halt the flow of vital commodities from the heart of the US, with potentially devastating economic consequences.
Last summer saw the country’s worst drought for more than 50 years, damaging crops across the Mid-West and making stretches of the Mississippi perilously shallow and narrow for barge traffic, which typically carries around $7bn of grain, coal, crude oil, cement and other materials and commodities along the river in December and January………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

After a year of tumultuous weather and global change, it should not be surprising that 2012 proved to be a transformative period for public opinion on energy.
Changing attitudes on the most hotly debated topics matter a great deal because they set the course for future policy decisions. Taking a closer look at trends over the past 12 months hints at what to expect in several key areas of the U.S. energy landscape in 2013………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

Many people trot out their predictions for the coming year right about now. I’m generally allergic to predictions and think rather in terms of probabilities. Naturally, the world we live in is far too complicated to yield anything approaching certainty concerning such matters as the future price and supply of energy, future economic conditions, and future political developments. In the end, the future is simply unknowable.
So, I’ve tried to think of some developments which conventional wisdom has judged rather unlikely and which would therefore significantly alter our lives and perceptions should they occur–precisely because we are not prepared for them………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

The nation’s energy boom shows no signs of slowing in 2013, and that’s great news for consumers, job-seekers and most businesses. Residential electricity costs will fall 2.2 percent next year after adjusting for inflation, predicts the Energy Information Administration. Already low natural gas prices for consumers will be flat, the EIA forecasts.
Gasoline prices will drop more than 5 percent this year and rise less than inflation for the next decade, the EIA estimates. Perhaps the angst of $5-a-gallon gasoline will have to wait………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

In 2012 the oil price which is one of the key global economic factors was between $92 and $125 a barrel. Next year’s oil price will be about $100 on average but if the situation in the Middle East explodes oil could hit the level of $200, experts say.
For the whole of 2012 oil prices remained within a comfortable range for the global economy, without any serious ups or downs. Experts point out that moderate fluctuations satisfy everyone. Analyst Vitaly Krukov from IFD Kapital Group expects the average oil price to remain on the level of 2012………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

The year 2012 was a bumper year for the Organization of Petroleum Exporting Countries (Opec). The organization, led by Saudi Arabia, will pocket a record of more than $1 trillion in net oil revenues in 2012 as the annual average price for Brent, the benchmark, heads to an all-time high in spite of weak economic growth.
On Monday, Brent crude’s premium to Middle East benchmark Dubai grade rose to the highest level in more than two weeks. Royal Dutch Shell Plc (RDSA) bought a cargo of Oman crude through the Platts pricing window………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

Gold jumped on the last trading day of 2012 to finish up 6 per cent on the year on news of a possible U.S. fiscal deal, which lifted a market that had rallied earlier in the year on low interest rates, euro zone worries and central bank demand for bullion.
Other precious metals finished strongly, with palladium up nearly 10 per cent on the year, silver up 9 per cent and platinum up 8 per cent. Analysts expect bullion, which started 2012 at below $1,580 (U.S.) and scaled nearly $1,800 by October after the U.S. Federal Reserve rolled out a fresh economic stimulus, to chart newer peaks in 2013. The market’s all-time high above $1,930 was set in September, 2011………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

In nations such as India gold has a mythological, historical, economic and cultural significance when it comes to its hoarding and storing. The commodity has given an average of 20% return in last one decade and sustained demand, central bank buying, bullish price action, continuous positive returns have all attracted investors towards gold.
Investors invested in gold have received positive annual return of 12% in 2012 as imports climbed (though the import duty was a dampener), consumption surged and Indian Rupee depreciated against Dollar………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

As the gold price prepares to finish 2012 with a 6% increase for the year, North America’s gold advisor, Gold Price has released its special report “A Glimpse Of New Years Gold Prices Since 2001.”
Arthur McGuire, Vice President of Gold Price says “In the past 12 years, wise investors have turned to gold because it’s one of the most effective profit and wealth preservation investments when economies are sour. Gold has increased over 500% since 2001 and over 6% in 2012 alone, far outperforming many investments ranging from stocks to bonds and real estate. We expect to be here for several more years as gold continues to benefit from the bad economic choices of our global leaders.”……………………………………….Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

Yes – its annual stick your neck out time for precious metals commentators as we try and foretell what will happen in the markets over the coming year – and precious metals price forecasting is an invidious business.
Once you go on record with a prediction it’s there for all to see – and, if you’re unlucky, to refer back to should your crystal ball prove to be wildly incorrect. So, firstly, what is this writer’s track record in predicting the gold price? Well, in 2012 not great, although far less inaccurate than most………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

From its November 2008 market lows, the SPDR Gold Trust – the No. 1 proxy for the “yellow metal” – rose as much as 158%, reaching its peak in September 2011. But it’s down about 13% since that time (though it’s up 5% year to date), and a lot of folks are wondering what gold is worth, and how they should play it.
Wall Street has grown more tepid on gold, with many of the investment banks ratcheting back just a bit on their target prices. But most also see prices heading up to and beyond the $2,000 level in 2013, meaning they see a potential gain of 22% or better………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

Just seeing how gold and silver prices have reacted after QE4 was announced should be enough to convince even the most skeptical investors that the gold and silver markets are not really “free markets” and that the prices are really being manipulated.
Prices have dropped in the days following the QE4 announcement, and there is normally no more positive news for the precious metals than the announcement of massive money printing………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

With the depreciation in Indian Rupee adding to the bash, Indian silver bugs have enjoyed 13% return in 2012 with around 30% reduction in trading volume on the MCX compared to 7% returns in the international markets.
Main reason for investments to pour into gold and silver is the continuous stability witnessed in the global bullion markets. Besides it is easy to liquidate gold and silver. Normally, the commodity melts in the month of December following speculative selling pressure and profit booking as prices are trading at yearly high levels………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

Nickel has been the worst performing metal in base metal complex in the past one year on MCX and LME. And nickel is the only metal in base metal complex that has given negative return in 2012.
Nickel futures have given almost 4% negative return on the MCX while on LME it has given negative 7% return. Nickel future seems ready for a change in fortune in 2013 as Nickel’s 20% fall in 2012 has made it cheaper than pig iron, a substitute made from low grade ore from Indonesia and the Philippines………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

Copper ended the year on a strong note Monday, settling at the highest price in almost two weeks on hopes that upbeat Chinese industrial data and last-minute U.S. talks to avert the fiscal cliff pointed to higher demand for the industrial metal in 2013.
The front-month copper contract for January delivery rose 6.35 cents, or 1.8%, to settle at $3.6410 a pound on the Comex division of the New York Mercantile Exchange, the highest settlement since Dec. 17. The most actively traded copper contract, for March delivery, rose 6.3 cents, or 1.8%, to settle at $3.6525 a pound………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

Copper prices reached near a two-month high of $8,140 a ton on Dec. 10, following news that industrial production in China — the world’s top consumer of the industrial metal — grew strongly at an annual rate of 10.1% in November.
While China’s export-dependent economy continues to struggle with weak demand from key Western markets, its manufacturing sector has avoided contracting in the past few months as a result of the $157 billion infrastructure spending bill passed in September………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

Just what are you investing in when you invest in commodities ETFs? There’s no real “market cap” of a commodity, so we’ve had countless debates here at IndexUniverse about whether the best proxy to determine weights is production, consumption or open interest on futures contracts.
Some commodities indexes, like the Rogers indexes, attempt to determine each commodity’s “economic importance,” and then use that figure to determine weights………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

With 2012 in the books, it is fair to say it was a mixed year for commodities exchange-traded products. Due to the European sovereign debt crisis, slowing growth and demand in the emerging world and persistent concerns about the U.S. recovery, commodities were an “on again, off again” asset class in 2012.
Broadly speaking, it was not a good year for commodities as the Thomson Reuters-Jefferies CRB index closed lower for the second consecutive year. That is despite the fact that three of the index’s 19 components posted double-digit gains and 13 closed the year higher………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

There are very few things that affect every human being on the planet. But regardless of age, race, gender or religion, only one thing ties everyone together — the need for food.
That’s why my No. 1 commodity for 2013 is corn. Corn is coming off a blistering performance in 2012, jumping more than 50% this summer after an historic drought hit the Midwest and wreaked havoc on production and production forecasts. Take a look at the big jump below in Teucrium Corn, an exchange-traded fund (ETF) that tracks the price of corn………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

Coffee prices have fallen more than 50% since 2010, which can be seen through iPath DJ-UBS Coffee Subindex Total Return SM Index ETN, which is a coffee exchange-traded fund.
This investment seeks to replicate the returns that are potentially available through an unleveraged investment in coffee futures contracts as well as the rate of interest that could be earned on cash collateral invested in specified Treasury bills………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

Hedge funds cut bullish commodity bets to a six-month low as mounting concern that slowing economic growth will erode demand drove prices toward the first fourth-quarter retreat since the global recession.
Speculators reduced net-long positions across 18 U.S. futures and options by 11 percent to 675,625 million contracts in the week ended Dec. 24, the lowest since June 19, U.S. Commodity Futures Trading Commission data show. Gold holdings reached a four-month low, while those for copper dropped for the first time in five weeks. Investors are the most bearish on natural gas since May………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

Commodity futures market remained subdued in 2012 with turnover stagnating at last year’s level of Rs.174 trillion and the government’s Bill to strengthen the regulator FMC (Forward Markets Commission) also getting stuck in Parliament.
FMC’s steely resolve to curb speculation in various agricultural commodities like guar futures and the MCX becoming the country’s first commodity exchange to be listed were some of the positives during the year. “The turnover of the exchanges has been declining every fortnight, especially in bullion, but the cumulative turnover would be close to the 2011 level.” FMC chairman Ramesh Abhishek said………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

The US dollar ended mixed against major currencies on the last trading day of 2012 after President Barack Obama said an agreement to avert the “fiscal cliff” was “within sight” but “not done” yet.
In late New York trading on Monday, the euro was traded around $1.3190 and the dollar bought about 86.7 Japanese yen. For the whole year of 2012, the euro has gained 1.8 percent against the dollar this year, despite lingering worries over eurozone debt crisis and mainly boosted by a series of good news from Europe recently………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

The simmering currency war among the world’s major economic powers is set to heat up significantly over the coming year following the decision by the US Federal Reserve earlier this month to step up its so-called “quantitative easing” program.
Under the new initiative the Fed will expand its holdings of financial assets from their present level of $2.9 trillion to some $4 trillion by the end of 2014 through continuing purchases of mortgage-backed securities and Treasury bonds………………………………………..Full Article: Source

Posted on 02 January 2013 by VRS |  Email |Print

The lack of participation in the FX market today has meant an increase in volatility for many of the major currencies. The EUR/USD for example soared at the start of the U.S. session as equities opened higher only to give up those gains when stocks turned negative.
U.S. markets were open for trading, but with Europe closed for Boxing Day and most U.S. investors out for the entire week, there was very little reason for the excitement during the North American hours………………………………………..Full Article: Source

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