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Commodities Briefing 01.Feb 2013

Posted on 01 February 2013 by VRS |  Email |Print

Many financial institutions and multinational organizations view speculating on food commodities as a dangerous game and a contributor to global hunger. Despite its bruised reputation, Deutsche Bank is leaping back into the business.
Nikolaus von Bomhard, CEO of the reinsuring giant Munich Re, feels that speculation in food commodities isn’t entirely harmless. “There is a limit at which additional liquidity no longer creates additional value,” he says. Munich Re doesn’t invest in food commodities, nor does it offer any derivatives to hedge against risk in food production………………………………………..Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

Rarely is Deutsche Bank’s press conference as colorful. But Thursday morning it was barely possible to make it past the rabble of protestors chanting songs about world food supply and rising food prices. So Deutsche had some explaining to do as to why it’s once again selling financial products based on agricultural commodities.
Its return, after barely a year, announced by Co-Chief Executive Juergen Fitschen earlier this month at Germany’s biggest agricultural fair Gruene Woche, or “Green Week,” comes at a time when the bank is making tremendous efforts to repair its tarnished public image. And its two new co-chiefs, who took the helm in June, unrelentlessly advocate the bank’s need for “cultural change.”……………………………………….Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

BlackRock’s Malcolm Smith urges investors to use the sector’s current slump as a buying opportunity, as improving macro data coming out of China suggests share prices will not stay low for long.
The long-term case for investing in commodities is alive and well, according to BlackRock’s Malcolm Smith, who believes the recent rough patch has simply presented investors with an attractive entry point………………………………………..Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

Commodity stocks in the food, timber and infrastructure sectors look attractive for 2013, Mike Underhill, founder and chief investment officer of Capital Innovations, told CNBC. “Commodities have always been an interesting asset class. But playing commodity stocks in a portfolio that’s diversified prudently is a way to gain capital appreciation with hard asset ownership as an inflation hedge,” Underhill said.
He likes stocks with exposure to food, fuel and forests. All three resources will be in demand as the global population only continues to grow………………………………………..Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

Dry conditions and the high Australian dollar will have a big impact on commmodity prices this year. Rabobank commodity analyst Tracey Allen said the elevated Aussie dollar would put pressure on export earnings and create a “headwind through 2013.”
“We’re beginning to see agribusinesses come to terms witn the higher dollar and look for economies elsewhere,” Ms Allen said. She said the higher dollar was being driven by weakness in the US dollar………………………………………..Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

High Brent crude prices could dent a global economic recovery while Europe’s economy holds the key to determining world oil demand in 2013, the chief economist of the International Energy Agency said on Thursday.
Brent crude hovered near $115 per barrel on Thursday, not far from a more than three-month high, as the U.S. Federal Reserve’s pledge to stick to its bond-buying stimulus plan and upbeat Euro zone data fuelled optimism about oil demand. ……………………………………….Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will raise shipments through mid-February as a winter demand peak in the northern hemisphere approaches, according to tanker tracker Oil Movements.
The group that supplies about 40 percent of the world’s oil will export 23.6 million barrels a day in the four weeks to Feb. 16, up 100,000 barrels, or 0.4 percent, from the previous period, the researcher said today in an e-mailed report. Those figures exclude Angola and Ecuador………………………………………..Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

OPEC crude oil production declined to a 15-month low as Saudi Arabia reduced output because of waning demand, a Bloomberg survey showed. Output in the 12-member Organization of Petroleum Exporting Countries slipped 525,000 barrels, or 1.7 percent, to an average 30.479 million barrels a day this month from a revised 31.004 million in December, the survey of oil companies, producers and analysts showed.
The December total was revised 430,000 barrels a day lower mostly because of the change to the Saudi number. ……………………………………….Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

The International Energy Agency said it was too early to revise its estimate for Iranian oil exports amid speculation that the Persian Gulf nation boosted shipments in December. Iran’s crude shipments were 1.2 million barrels a day, the Paris-based agency said in a Jan. 18 report, an estimate it won’t be revising until next month, Diane Munro, a supply analyst at the IEA, said.
That’s down from 1.45 million in November. Reuters reported earlier today that Iranian exports rose to 1.4 million barrels a day last month, the highest level since European sanctions began, citing data it compiled from analysts and shipping and customs data………………………………………..Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

Iran’s crude exports to its biggest customer, Asia, fell by a quarter in 2012 and shipments this year are expected to drop by at least 12 percent under U.S. sanctions pressure, but ample alternative supplies will keep refiners flush with oil.
Asia’s main oil buyers cut imports from Iran to an average of 1.09 million barrels per day in 2012, government and industry data shows, and planned cuts in term contracts for 2013 point to further reductions of at least 135,000 bpd………………………………………..Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

Gold would fall back to $1,000 an ounce any time soon, said Global Hunter Securities, LLC (GHS) in a research note. According to GH Securities, the mining industry has seen rampant cost inflation over the last decade and further cost inflation is anticipated.
“When gold was $300-$400 an ounce in the 1990s, the average cost of mining was less than $300 an ounce, allowing gold to remain economically viable. In today’s gold industry, the average all-in cost of exploration, financial analysis, construction, mining and refining is most likely at or above $1,000 per ounce,” the firm added………………………………………..Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

Sometimes people ask me: “How do we transition to a gold standard system?” People think it’s really difficult. Actually, it can be very easy. The easiest, simplest, fully-operational form of a gold standard system could be implemented in ten minutes. It doesn’t cost anything, and doesn’t require any gold bullion.
I don’t think it is the best system. But, it is fast and easy, and fully operational. The better classical economists have always known that gold bullion itself is not really necessary for a gold standard system. Gold is the “standard,” in other words, the “standard of value.” It is just something you compare against………………………………………..Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

Maybe I’m reading too much into the latest utterances on likely gold price performance this year and going forward but I do get the feeling in my bones that the yellow metal’s flat performance of the past 15 months or so may be coming to an end – not in a collapse, but in an upwards surge. There do seem to be some fundamental moves which could suggest a bit of a sea change in sentiment towards precious metals, and gold in particular.
The first of these is the German decision to repatriate half its gold, from vaults in the U.S. and France, over the next seven year. Now while the Bundesbank seems to deem this a satisfactory programme, the German in the street must be asking why can this not be achieved this year, or this month even………………………………………..Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

The crises that await the world would be systemic and there could only be one way to avert the same when the tide turns against you: own gold!
“Yes it does go up and down but I am fearful of a systemic crisis, wars and so on and it is because I am fearful that I own gold,” said Marc Faber to CNBC financial journalist Maria Baritromo in a recent interview; Gold Core said in an update………………………………………..Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

Overall market sentiments in the BRIC (Brazil, Russia, India , China) region has brightened in January but dark clouds still loom in the horizon, according to an assessment by MEPS International.
Stability is expected in Brazil where production is rolled steel is forecasted at 26.2 mn tons, an increase of close to 4% over previous year. Russia steel demand trends aren’t bright- as doubt lingers on growth prospects in long steel and finished steel demand has fallen short of projections. ……………………………………….Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

The first-ever US exchange-traded fund (ETF) is celebrating its 20th anniversary this week. Launched in January 1993 by State Street Global Advisors with just $6.5 million in assets, the SPDR S&P 500 ETF (SPY) is today the world’s largest, with assets in excess of $120 billion. It is also the most actively traded security on the planet.
Back in the early 1990s, SPY—known as “Spider” among traders—was seen as a ground-breaking innovation that improved access to the market for investors. And yet, at the time very few could have imagined that ETFs would transform the way in which investors, advisers and institutions build and maintain portfolios………………………………………..Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

One of the most well-known and respected technical analysts says he uses ETFs as the main tool to trade opportunities based on intermarket correlations.
“Ten years ago, if you wanted to trade commodities or currencies, you had to trade futures. Also, in the old days, you had to use mutual funds if you wanted to trade sectors,” John Murphy tells TraderPlanet. “The beauty of ETFs is that they let you trade any part of the stock market that you want – large cap, small cap, for example.”……………………………………….Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

In the wide world of commodity investing, there is perhaps no corner of the market more popular than energy equities, as this volatile yet often rewarding sector has become a staple in many investors’ portfolios.
Taking an equity approach to the most heavily traded segment of the commodities market is appealing to many, as this strategy avoids the nuances and complexities of futures tradings as well as the increased risk inherent in these financial instruments. And with the evolution of the ETF industry, investors can now gain cheap and easy access to a wide array of energy equities through a single ticker……………………………………….Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

The Capital Markets Authority has hired a consultant to guide the formation of a futures exchange market in Kenya. CMA acting chief executive Paul Muthaura said the Pakistan national, with vast experience in futures trading, started work this week.
The consultant has a one-year period to have developed all the necessary requirements for the establishment of a futures market. “This is a very significant step for us,” said Muthaura on the sidelines of a financial literacy forum in Nairobi………………………………………..Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

Wall Street banks and Chicago commodity traders on Thursday will each try to sway the top U.S. derivatives regulator their way at a public hearing on whether new rules unduly favor one of the two rivals.
The Commodity Futures Trading Commission (CFTC) is drawing up rules for swaps, speculative financial instruments that were unregulated at the time of the 2007-09 financial crisis, and were widely blamed for exacerbating it………………………………………..Full Article: Source

Posted on 01 February 2013 by VRS |  Email |Print

John Roncevich, the former head of Wells Fargo & Co. (WFC)’s commodities business, has left the lender and formed a venture to advise banks on ways they can sidestep some of the new regulations affecting the industry.
Roncevich departed in November after ceding oversight of the business in July, Elise Wilkinson, a bank spokeswoman, said via e-mail today. Roncevich joined Wells Fargo through its 2008 purchase of Wachovia Corp. and ran the sales and trading of physical commodities and derivatives. Pekka Kauranen now heads commodities trading at the San Francisco-based firm………………………………………..Full Article: Source

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