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Commodities Briefing 11.Feb 2013

Posted on 11 February 2013 by VRS |  Email |Print

Hedge funds increased bullish commodity bets for the fourth straight week and became the most bullish on copper since December as signs of faster growth in the U.S. and China fueled the best start to the year since 2005.
Speculators boosted net-long positions across 18 U.S. futures and options in the week ended Feb. 5 by 11 percent to 885,655 contracts, marking the longest stretch of gains in more than six months, U.S. Commodity Futures Trading Commission data show. Traders lifted bullish wagers on everything from copper to platinum, corn and soybeans………………………………………..Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

Skepticism over the so-called “super-cycle” in commodities has now gone mainstream, according to an analyst at Capital Economics, but it’s not time to give up on all of them.
“It has taken two years of dismal returns and a regulatory backlash, but the consensus has finally swung round to our long-held skepticism about the ‘super-cycle’ and the diversification benefits of investing in commodities,” said Julian Jessop, head of commodities research at Capital Economics………………………………………..Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

Everyone is currently worried about inflation with the central banks printing like there is no tomorrow. But the actual inflation numbers are much less than people think inflation is in their everyday lives. For example, Let`s look at Cocoa prices, literally at the bottom of their five year range at 2,227 per ton, well below the 3,800 per ton level established in March of 2011.
If we take Rough Rice which closed at $16.34 per cwt. it is well below the highs of $22.65 and $19.02 per cwt. established in April 2008 and September 2011 respectively……………………………………….Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

Crude oil production from the Organization of the Petroleum Exporting Countries (OPEC) fell to 30.45 million barrels per day (b/d) in January from 30.65 million b/d in December, led by a further drop in volumes from Saudi Arabia, a just-released Platts survey of OPEC and oil industry officials and analysts showed.
Saudi Arabia reduced output to 9.25 million b/d in January from 9.45 million b/d in December. The January level was the lowest since an estimated 9.05 million b/d in May 2011………………………………………..Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

The agreement would allow Japan to quickly seek additional oil supplies via a telephone hotline. Japan and Saudi Arabia will sign an agreement that will allow Tokyo to make emergency requests for additional supplies of crude oil, Japan’s Nikkei newspaper reported.
The agreement would set up a telephone hotline between the two governments to allow Japan to quickly seek additional oil supplies in the event of extraordinary circumstances such as terrorist attacks, unrest in the Middle East or a spike in the price of oil. Japanese Economy, Trade and Industry Minister Toshimitsu Motegi will travel to Saudi Arabia on Saturday to sign the pact, Nikkei said………………………………………..Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

The U.S., the world’s largest oil consumer, will continue to import crude from Colombia and Venezuela, according to the International Energy Agency. A mismatch in the U.S. refining system creates a preference for heavy crude grades from nearby countries, Antoine Halff, head of IEA’s markets division, said during a conference in Cartagena.
“The quality of Colombian crude suits the U.S. very well,” and the same is true for new production from Venezuela’s Orinoco heavy oil belt, said Halff………………………………………..Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

The world’s superpowers have traditionally relied on those countries rich in energy. But as the world moves to renewables, who will emerge as the new leading nations? “[O]ur oil addition is not just changing the climate system; it is also changing the international system… First, and most important, through our energy purchases we are helping to strengthen the most intolerant, antimodern, anti-Western, anti-women’s rights, and antipluralistic strain of Islam - the strain propagated by Saudi Arabia.
“Second, our oil addition is helping to finance a reversal of the democratic trends in Russia, Latin American, and elsewhere that were set in motion by the fall of the Berlin Wall and the end of Communism…I call this phenomenon ‘the First Law of Petropolitics’: As the price of oil goes up, the pace of freedom goes down…”……………………………………….Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

The main reason for falling prices internationally is that equities are turning favourable and many emerging and developed market indices are at multi-year highs. Bullion bulls seem to be developing doubts about the prospects of the yellow metal.
Just a few months ago, everyone was bullish, expecting a one-side upward-run. Now, doubts are being raised on the continuation of the rally, at least in the short to medium term………………………………………..Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

It’s amazing that no one is talking about this.“China’s demand is robust” they’ll say. “China may overtake India as the top gold consumer” they’ll add. “Exports rise year over year” the chatter continues. But no one, and I mean no one, in the mainstream is calling a spade a spade. China is hoarding gold at a rate never seen before – like modern day conquistadors. Only today, unlike in the time of the conquistadors, the blood trail is tough to follow, as are the shipfuls of gold.
It’s an egregious rake, though. And while the mainstream media fails to cover this huge story, we’ll do our best to figure out just how much gold China is holding………………………………………….Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

Diverse price performance was the feature across the global commodity markets last week - covering energy products, base and precious metals as well as agriculture. Brent crude continued to rise with the prompt contract rates crossing levels last seen eight months ago, spurred by a combination of improving macroeconomic sentiment and intensification of geopolitical concerns.
The metals complex was rather diverse with most base metals registering a price fall except zinc that was up 1.2 per cent and copper nearly unchanged, while precious metals generally retained their upward trajectory with platinum (up 1.6 per cent) the real performer. Gold was unchanged week on week, while silver edged slightly higher………………………………………..Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

Russia’s United Company RUSAL Plc, the world’s top aluminium producer, said on Friday it expects 2013 global aluminium demand will rise 6 percent, fuelled by investment in large-scale infrastructure projects in China.
RUSAL’s positive tone comes after a tough year for aluminium produers due to the global economic slowdown, although it cautioned the European debt crisis would continue to weigh on aluminium prices in the short term………………………………………..Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

Steel prices in January showed a mixed trend across markets with US prices extending decline seen in December while China, European prices gained, while Indian markets were flat. Turkey prices gained on restocking, improved demand, according to a monthly report from The Steel Index (TSI).
In US markets, declining offers from sellers steadily pushed down prices. Spot Hot rolled (HR) pries tumbled with TSI daily index falling from US $640/short ton to US$614/short ton at end of January. Flat carbon steel imports dipped heavily in US Gulf coast. Steel shipments dipped sharply to 2.5 mn tons, the lowest in three years, TSI added………………………………………..Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

While it’s impossible to know what the future holds, it is possible to surmise what large numbers of investors think the future holds. And from the perspective of Martin Kremenstein (left), who oversees Deutsche Bank’s $12 billion ETF portfolio in the U.S., investors are seeking portfolio diversification and expressing concern over inflation risk through a significant and growing allocation to commodities.
Speaking with AdvisorOne ahead of this year’s Inside ETFs conference, which kicks off Sunday in Hallandale Beach, Fla., the Deutsche Bank executive has a unique vantage point, since he oversees the market’s largest broad-based commodities ETF………………………………………..Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

A new stock exchange in India opens for trading on Monday, pitching the country’s main commodity bourse into a three-way battle with the two established incumbents as they look to attract investors around the world. The new venue, MCX-SX, will trade more than 1,100 equities, develop derivatives like futures and options and launch its own index of leading shares, the SX-40.
It was formally unveiled at an event attended by Indian Finance Minister Palaniappan Chidambaram in Mumbai on Saturday………………………………………..Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

Open interest in raw sugar, cotton and arabica coffee markets trading on ICE Futures U.S. continued to rise steadily, reaching the highest levels in up to three years on Feb. 6, exchange data showed on Thursday.
Total open interest in raw sugar futures jumped by 0.9 percent to 848,677 contracts on Feb. 6, the highest level in three years, ICE data showed. In cotton futures , open interest climbed for the eighth straight day in the previous session, rising by 1,429 contracts to 214,167 contracts, the highest since February 2011………………………………………..Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

The renminbi fell slightly against the dollar in China on Friday. The yuan, as the currency is informally known, began the day up over the greenback but weakened as trading progressed.
The reason for the afternoon decline? Chinese enterprises entered the market and bought the American currency in large amounts late in the day. “It just seems so odd that companies would choose this particular time to buy such big amounts of dollars,” an unnamed Shanghai trader in a local bank told the Wall Street Journal………………………………………..Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

U.S. and European financial policy makers are discussing issuing a joint message designed to head off a potentially destabilizing round of currency devaluations, according to people familiar with the talks.
The discussions follow comments in recent months from Japanese Prime Minister Shinzo Abe and his aides implying they were targeting a specific exchange rate. This rhetoric, and a sharp drop in the yen, have sparked warnings from Latin America to Europe about a looming currency war in which nations devalue their currencies to boost exports………………………………………..Full Article: Source

Posted on 11 February 2013 by VRS |  Email |Print

Russia hosts a meeting of G20 central bankers this week, at which the subject of currency manipulation is likely to be dominant. Against this background, data over the next few months will be scrutinised for evidence that movements in the foreign exchange markets fairly reflect economic fundamentals.
Japan, a key figure in the currency wars debate, is the focus of two events this week, none more important than the first reading of its fourth-quarter gross domestic product on Wednesday, with all components expected to show improvement………………………………………..Full Article: Source

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