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Commodities Briefing 14.Jan 2013

Posted on 14 January 2013 by VRS |  Email |Print

As it seeks a new chief to lead it out of a negotiating death-spiral, the World Trade Organization looks doomed to be fatally undermined by new global carve-ups that will leave many of the world’s poorest sidelined.
At its creation 18 years ago, as the “third pillar” of the post-World War Two economic system alongside the World Bank and the International Monetary Fund, tariffs fell by a third and world markets, from farm produce to finance, were opened up………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

The past year was not only eventful for the commodities market, but also remarkable because various agricultural commodities touched new highs. Considering the fundamentals, supply fears lingered largely due to poor rains in India during the first half of the monsoon, which not only reduced the sowing of kharif crops but also raised worries over the crop yield.
Even the US was hit by its worst drought in 56 years, which parched the soybean and corn crops. However, the revival of monsoon in India during the second half of the season helped ease some pressure on sowing and yield. Further, the rabi sowing also progressed well and the weather conditions so far have been favourable for the crop yield………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

Hedge funds cut bullish commodity wagers to the lowest since June before prices rallied to a two- month high on signs of a rebound in Chinese economic growth.
Speculators trimmed net-long positions across 18 futures and options by 5.4 percent to 654,443 contracts in the week ended Jan. 8, the lowest since June 19, U.S. Commodity Futures Trading Commission data show. Wagers on a corn rally dropped for a fifth week before a reduction in U.S. stockpile data sparked the biggest jump in prices in five months. Gold holdings fell to the lowest since August as the metal snapped a six-week slump………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

Commodities continued to show weakness into the second week of 2013 despite rising stock markets and a falling US dollar. Investors are generally in a positive mood at this time of year, but so far this sentiment has only been seen in equities with global stocks rising to their highest level in 19 months.
The US dollar rally seen during the first week quickly faded and the EURUSD has now returned to the top of its current range. However, so far this has failed to lift commodities. Chinese economic data, though, did help support prices as exports jumped by 14 per cent in December, thereby potentially confirming a rebound in the global economy………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

There has been no official announcement but Saudi Arabia’s effective target for oil prices appears to have risen from $100 to $110 per barrel, based on recent changes in the kingdom’s production levels.
In theory, the kingdom remains committed to an informal target of $100 for Brent first announced in a CNN interview given by Oil Minister Ali Al Naimi in January 2012. “Our wish and hope is that we can stabilise this oil price and keep it at a level around $100,” Naimi said………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

Crude oil markets have started the year on a positive note, drifting marginally higher with front month Brent stepping out of its recent$108-111/bbl range.
While the fiscal cliff agreement has cleared the macro cloud for now, there continues to be a lack of directional momentum for prices to move much further away from the $111/bbl mark, at least for now, with prices having retraced gains above $113/bbl by the end of the week………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will increase crude shipments this month to meet the final phase of peak winter demand in the northern hemisphere, according to tanker tracker Oil Movements.
The group that supplies about 40 percent of the world’s oil will export 24.15 million barrels a day in the four weeks to Jan. 26, up 210,000 barrels, or 0.9 percent, from the previous period, the researcher said today in an emailed report. The figures exclude Angola and Ecuador………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

Saudi Arabia appointed two of its former OPEC officials as oil experts to a council that advises the king on energy and economic matters, including Majid al- Moneef, a contender for the post of OPEC Secretary General.
Al-Moneef was reappointed to the Committee on Economic Affairs and Energy, which is part of King Abdullah’s Shoura Council, for another four years, his third term, according to a royal decree issued today and carried by Saudi Press Agency………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

The reports from the Islamic republic over the country’s oil exports have turned out to be contradictory. On Sunday, Press TV quoting Iranian Oil Ministry spokesman said that Iran faces no problem selling its oil despite tough U.S.- engineered sanctions against the country over its disputed nuclear program.
Alireza Nikzad-Rahbar said Saturday that Iran’s oil export is currently in “normal conditions.” The country has succeeded in managing the oil market despite international restrictions………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

While oil and gas producers were busy watching for the evolution of prices and supply and demand fundamentals for their commodities, coal fortunes have been on the rise and are likely to continue so. This is contrary to expectation due to the complex environmental problems of burning coal and the usually higher investment required for its use.
Between 1965 and 1972 world coal consumption rose by hardly 6 per cent while oil and gas consumption rose by almost 70 per cent each. The world seemed to be getting out of coal………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

The recent price movement of gold has been frustrating for some people. The yellow precious metal logged its twelfth consecutive annual gain in dollar terms and climbed higher against every major fiat currency in 2012. However, gold has been stuck in consolidation mode and finished the year with its worst quarter in four years. Furthermore, some market participants are claiming the bull market is over.
Gold finished last year about 7.0 percent higher at $1,675 an ounce. It capped the longest streak of annual gains since at least 1920, but gold entered the new year with a less impressive record………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

New research from The Real Asset Company finds that Q1 is the best time to watch the gold price make gains from month to month, which suggests the end of December or right at the beginning of the year are the times to get on the gold investment band-wagon. Not “if” but “when” to invest in gold.
According to World Gold Council data, it is estimated that in the UK alone 600,000 people will be looking to invest in gold, for the first time, over the next 12 months. So we thought we would try and give some helpful advice as to what to look out for in gold price action in 2013, based on the last 12 years………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

Could platinum be a better bet than gold in 2013? Despite bullish analysts’ predictions on gold for this year, the precious metal had a lacklustre start. In contrast, the outlook for platinum may be brighter.
The platinum-gold spread – or the difference between the price of gold and platinum – has been narrowing from above $100 a troy ounce. Spot gold is now at $1,662.80 an ounce and spot platinum at $1,632.25. This means the spread has narrowed to just $30.50. There is a real chance that the price of platinum could move above that of gold in the next few months………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

When making forecasts and writing outlooks, analysts must look at a multitude of things. We usually begin by examining the macro landscape via inter market analysis.
How are the various markets trending? Which are lagging? Where are the divergences? As we begin 2013, there has been an important shift in regards to precious metals that few analysts have picked up on. The rest of our analysis filters down from this discovery………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

For centuries, demure Japanese brides with their white face make-up and painted red lips were happy with obi, a kimono sash, as a gift. De Beers changed all that in the late 1960s. An ad blitz drove the message that it’s the diamond ring that symbolised the modern woman. A market was born.
Decades later, a lobby of gold miners tried something similar in India. It hired the leading lady in the most-watched saas-bahu soap to run a string of ads on television and in newspapers, where the lady, by then a household name, told her adoring viewers how lucky it was to buy gold on Akshaya Tritiya — a holy day for Hindus and Jains………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

Barclays has said in a report that gold may continue to struggle, at least in the short term and gold failed to benefit at all as a hedge of fiscal cliff risks in late 2012 while suffering more than most other commodities in the about-turn that greeted the FOMC minutes.
Meanwhile, the steep end-year decline in ETP buying (one of the few bright spots for gold earlier in 2012) has worsened in early 2013 with a net 10t of liquidation so far………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

Over the last two weeks, I suggested that the silver futures were headed to the 31.60 region, to be followed by a decline which should ideally target at least the 28.67 region. While we topped at 31.53, and then saw a nice decline, which bottomed at 29.12 for a 2.39 decline, and a nice short trade for those that took it, we still came up 45 cents short of my minimal target.
But, before I discuss the next market moves in silver, and whether it will still reach the lower levels cited in the last article, there is a “fundamental” issue I need to address once again, and that is the so-called “manipulation” perspective………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

Barclays in a precious metals price outlook for 2013 has said that platinum prices may average $1690/oz for the year even as it may touch a high of $1840/oz and a low of $1390/oz.
Platinum found itself pulled and pushed by the escalation of supply disruptions in South Africa and tumbling European auto demand. But unlike in the previous year, the metal struggled to find meaningful support from its marginal cost of production………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

The top ten trends for mining companies this year have been assembled and cost cutting is at the top of this list. Deloitte’s Tracking the Trends of 2013 report says in the face of rising costs, falling commodity prices and other challenges, companies will be able to thrive into the future if they can set solid strategic direction and hold that course amidst shifting industry realities.
According to Deloitte this year’s biggest themes will be: Counting the costs, managing demand uncertainty, capital project deceleration, preparing for the M&A storm, governments getting greedier, combating corruption, climbing the social ladder, plugging the talent gap, playing it safe and getting the most out of technology………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

Is the mining boom back? While everyone was on holidays, the price of iron ore has shot back up to $US158 a tonne. It was iron ore’s slump to $US86 a tonne at the end of last year that sparked fears of the mining boom’s end.
In August, BHP Billiton shelved expansion plans for Olympic Dam while Fortescue Metals Group announced plans to cut thousands of jobs. By December, amid fear of the US fiscal cliff and a volatile commodity outlook, the Federal Government also shelved its plans for a budget surplus in 2012-13………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

A pair of energy ETFs from U.S. Commodity Funds could start trading at a premium to indicative value after they temporarily halted the creation of new shares.
According to regulatory filings, U.S. 12 Month Natural Gas Fund and U.S. Short Oil Fund (DNO) have temporarily suspended the ability of the authorized participants, the firms responsible for making markets in ETFs, to purchase new creation baskets in the funds………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

International metal and commodities broker Newedge, a member of the London Metal Exchange, plans to expand in Asia. Its director of Asian commodities trading, Richard Fu, said Hong Kong Exchanges and Clearing’s recent acquisition of the LME would enhance the broker’s expansion plan.
HKEx completed its acquisition of the world’s largest metal exchange for £1.39 billion (HK$17.4 billion) last month. The LME has an 82 per cent market share of global metal futures transactions………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

It is impossible to write the history of hedge funds or American investors without including George Soros. Though Soros did not invent the hedge fund, he was among a very select group to show how a well-run fund employing significant leverage could generate outsized returns for prolonged periods of time.
Due to a particular combination of success, aggression and willingness to speak to the press, Soros found his name tied to two major financial events of the 1990s and he became for many the epitome of a hedge fund manager. According to the most recent Forbes numbers, Soros is the 15th-richest person in the world, with a $19 billion net worth………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

For almost two decades, Japan — the world’s second largest economy (now third)– has been floundering in the swamp of stag-deflation. Following the assumption of leadership by Prime Minister Shinzo Abe this has changed, however.
Keeping up with his election campaign promises, Mr. Abe launched a $117 billion fiscal stimulus to stimulate the country’s ailing economy. At the same time, he has directed direct Bank of Japan, which lost its (short-lived) independence, to print an unlimited amount of money—creating a yen tsunami that will push the country from deflation to inflation!……………………………………….Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

For those who find ‘tea or coffee’ a question too far first thing in the morning, relief may soon be on hand - a combination of both. Researchers claim they have discovered the ultimate brew - a tea made from coffee leaves which is healthier than both of the drinks.
The coffee leaf tea, which is said to have an ‘earthy’ taste that is less bitter than tea and not as strong as coffee, boasts high levels of compounds which lower the risk of diabetes and heart disease, experts said. It also carries far less caffeine than traditional tea or coffee and contains antioxidant and anti-inflammatory properties………………………………………..Full Article: Source

Posted on 14 January 2013 by VRS |  Email |Print

At the moment CO2 credits have dropped to $1.50 a tonne, according to the latest price information. Industry can buy CO2 credits at this new low price of $1.50 a tonne, meanwhile the long-suffering public are still forced to pay the $12.60 a tonne set by government on the price of energy we use.
Nick Smith kept telling us the tax on fuel and electricity was not a tax but an emission trading scheme. If this tax is a trading scheme it should be affected by the new low price being paid at the moment of $1.50 a tonne………………………………………..Full Article: Source

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