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Commodities Briefing 19.Feb 2013

Posted on 19 February 2013 by VRS |  Email |Print

Rabobank amplified ideas on the revival in soft commodities in the second-half of the year, ditching ideas of a flat performance by sugar futures and steepening the rebound it expects in cocoa prices.
The bank - which had forecast that soft commodities would put in a firm end to 2013, contrasting with a weak finish by grains – maintained its forecast for New York cotton futures to average 85 cents a pound in the last quarter of 2013, up 9% from the first quarter…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

Hedge funds and other big speculators slashed their bullish bets on U.S. commodities, taking aim particularly at gold which had lost some of its lustre this year, trade data released on Friday showed.
Fund managers also exited from corn, coffee and sugar during the week to February 12 as those markets headed south as well, the data from the Commodity Futures Trading Commission suggested. Gold suffered the largest withdrawals of the so-called “managed money” during the week, from a total of 22 commodities tracked by the CFTC…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

Jim Rogers has been bullish on agriculture for years now. He stated during an interview with the Economic Times in 2009: Ten years from now, it may be farmers who will drive the Lamborghinis and the stock brokers will drive tractors or taxis at best.
In order to get into his mind, one first needs to understand the mechanisms driving the commodities market, which is really the “real assets” market that includes agriculture, a very long term chart is in order. Here s one of the CRB interpolated from 1749 to the present…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

Major Middle East oil exporters could see a significant worsening of their trade balances of around 4%-10% of GDP in the long run if they fail to take measures against the rising shale oil production across the world, warns PricewaterHouseCoopers in a new report.
Shale oil and gas, extracted through a combination of horizontal drilling and hydraulic fracturing techniques (also known as fracking), has turned the United States into an energy powerhouse and accelerated crude output in the country from shale plays in the Bakken region in North Dakota, Eagle Ford in Texas and Marcellus in eastern United States…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

The Oil & Gas Industry has experienced a good start to 2013 as improvements in the global economy has seen both the U.S. Energy Information Administration (EIA) and OPEC raise their forecasts for global oil demand in 2013.
The EIA has raised its 2013 growth forecasts by 110,000 barrels per day (bpd) to 1.05 million bpd in 2013. Global oil demand is now expected to total 90.2 million bpd this year. The increase follows a report from OPEC earlier in the week projecting oil demand to increase by 840,000 bpd, 80,000 bpd higher than its previous estimate. Prices for Brent Crude have gained approximately 10 percent year-to-date hitting a 10-month high of over $118 a barrel. (Press Release)

Posted on 19 February 2013 by VRS |  Email |Print

Oil prices are acting as a brake on the global economy, and harming Europe in particular, the International Energy Agency’s chief economist said at a conference in London.
Europe will need to spend 500 billion euros ($668 billion) on oil imports this year, about 200 billion euros more than average levels, if oil prices remain near current levels, the IEA’s Fatih Birol, said in London at the start of International Petroleum Week. “Prices are very high,” he said in a Bloomberg Television interview. The “current level of oil prices is a major impact on the global economy, but especially for Europe.”……………………………………Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

A surge in U.S. oil production has pushed the country’s output to the highest level since 1992, threatening the dominance of the Organization of Petroleum Exporting Countries.
The United States pumped 7.06 million barrels a day in the week ended Feb. 8, up 1 percent from the previous week and extending last year’s 19 percent gain, the Energy Information Administration said this week. OPEC production fell to the lowest level in a year in January, the Paris-based International Energy Agency said in its monthly report, which also came out this week…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

Think gasoline prices are coming down this year? Think again. Between supply constraints, the usual suspects in the Middle East, and China, oil demand is seen hefty enough to keep prices stable to high for the foreseeable future. In fact, China’s oil demand is seen rising by 5% this year on the backs of an economic recovery.
Faster-than-expected economic growth could raise fuel demand even higher than market estimates, if car sales and property sales continue on their positive trend lines. A government stimulus program on infrastructure also remains a possibility when the new leadership formally assumes power at the March legislative meetings, Barclays Capital noted recently…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

Gold could get a break this week, maybe, in the form of China. That country is back from the Lunar New Year’s holiday and gold bugs will be scanning the horizons for signs of a pickup in physical buying demand and anything that could put a floor on recent gold selling. Getting lots of people nervous, gold dipped below that psychologically important support level of $1,600 an ounce on Friday.
“What can and will probably make a dent in the recent downward direction is the opportunistical buying to take advantage of the sharp recent price decline,” says Frederic Panizzutti, senior vice president at MKS Finance Geneva. “All factors that led gold toward higher levels over the last 3 years are still intact and we would see no reason why the medium term trend would have changed.”……………………………………Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

Gold is struggling to find near-term support from external drivers despite the positive backdrop of low interest rates and global balance sheet expansion, according to UK-based Barclays Capital.
Gold hit a six-month low of US$1,612.25/oz on the London Bullion Market on Friday and fell further to close at U$1,610.75/oz on Monday. The absence of the Chinese market for the one-week new year holiday, combined with technical selling were the main reasons for the drop, according to Barclays. Demand from India also softened…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

Silver prices may reach $45 to $50 by end 2013,as monetary demand for silver and gold is returning, primarily as a store of value and as a form of savings and investment, according to Jason Hommel of Silver Stock Report.
“$50 will likely be an epic price battle that may last 6 months to a year.Silver should hit $75 to $125 in the next peak or run up, likely sometime before the end of 2014,” he said…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

Copper prices are on their way to $4 per pound, and in a perfect global macroeconomic environment may even hit $5 per pound by the end of the year. During the third quarter of 2012, copper prices started seeing some major action on the upside.
In early September, strong manufacturing numbers coming out of China and India helped push copper prices from $3.40 per pound to above $3.80 in a matter of weeks. However, bearish signs from Europe and the United States put a lid on prices and the rally began to sputter, pushing copper back to the $3.50 range in the early stages of the fourth quarter…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

A number of high-cost mines are high cost because they have been starved of capital in recent years. As a result, Ernst & Young expects “a good number of these mines to be divested by the majors to owners with capital available for acquisition and reinvestment.”
In their report, Mergers, acquisitions and capital raising in mining and metals, 2012 trends, 2013 outlook, When opportunity knocks, who answers?, Ernst & Young observed that a key characteristic of last year’s deal activity was the increasing number of state-backed and financial investors funding the growth of mining and metals through mergers and acquisitions…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

The expected launch of exchange traded funds (ETFs) tied to commodities in China later this year will be a major milestone for the country’s capital market and one that will likely prove popular with investors, according to analysts. At present, there are 12 ETFs trading on the Shanghai Stock Exchange (SSE) with 40.8 billion yuan ($6.54 billion) in combined net assets, data from the exchange show.
According to analysts, China’s ETF market is set to become more diversified this year as new products, including bond-backed and gold-backed ETFs, are expected to make their debuts over the coming months. All of the ETFs currently trading on the Chinese mainland are tied to publicly-traded equities and stock indices…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

Commodity hedge funds have been in the doldrums somewhat, as the macroeconomic climate continues to make life difficult for managers. Performance, in effect, just hasn’t stacked up, leading to some institutional investors heading for the exit.
As the Financial Times reported on 6 February 2013, industry executives estimate that overall AUM in the commodity hedge fund sector has fallen “by at least 20 per cent in the past year, and perhaps by more than a third”…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

With India’s commodity trading volumes more than doubling through the past three years, many global commodity indices majors are now considering India one of the most promising markets for commodity indices trading.
S&P Dow Jones Indices (S&P DJI) feels the potential for commodities indices trading in the Indian market is immense. “India’s commodity market is growing big. More and more investors are now getting into commodities trading. We are looking at India and the entire Asia as a potential market for S&P indices,” said Daniel Ung, associate director (index research & design group), S&P DJI…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

G20 finance chiefs sharpened their stance against governments trying to influence exchange rates as they sought to tame speculation of a global currency war without singling out Japan for criticism.
Two days of talks between G20 finance ministers and central bankers ended in Moscow on Feb 16 with a pledge not to “target our exchange rates for competitive purposes”, according to a statement. That’s stronger than their position three months ago and leaves Japanese officials under pressure to stop publicly giving guidance on their currency’s value…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

The mobile money/virtual currency arena is getting more and more crowded. And the question remains: will the concept ever gain the critical mass needed to become the next big thing in finance?
From Bitcoin to M-pesa, Square, Paypal, Dwolla and Ven (to name just a few) … the number of new concepts is piling up. One of the latest is Mobino, brought to you by Jean-François Groff, whom FT Alphaville met on the sidelines of this year’s Lift2013 conference in Geneva. We followed up with an interview last week…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

The world’s largest economies took a step toward common global guidelines for exchange-rate policies with a pledge Saturday to refrain from targeting their currency policies to gain a competitive trading advantage.
The pledge, in a statement produced by finance ministers and central bankers from Group of 20 industrial and developing nations following two days of meetings here, marked the first time the group had agreed to such an explicit guideline on the issue. It came as officials sought to defuse global tensions over volatile exchange rates…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

Associate Professor Euan Mason of Canterbury University is surprised more hill country farmers are not showing an interest in carbon credit trading as they stand to boost their incomes while at the same time helping the environment.
Professor Mason said he is perplexed that some farmers have a negative attitude towards carbon trading and the climate change issue. He said hill country farmers with land that is eroding and, because of that, is relatively unproductive, have the potential to create wealth by sequestering carbon through forestry as part of the response to climate change…………………………………….Full Article: Source

Posted on 19 February 2013 by VRS |  Email |Print

More than 75 environmental organizations on Monday urged the European Parliament to end the European Union’s Emissions Trading Scheme, launched seven years ago as a market-oriented way of reducing pollution and greenhouse gases.
The parliament is due to vote Tuesday on a plan by the European Commission to overhaul the ETS with the aim of reversing the trend that has seen the price of carbon permits plummet 75 percent in the last five years…………………………………….Full Article: Source

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