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Commodities Briefing 13.Mar 2013

Posted on 13 March 2013 by VRS |  Email |Print

Back in the late 1960s and early 1970s, rapid worldwide population growth and soaring commodity prices gave rise to fears that humans were outgrowing their planet’s resource capacity. Some worried that crisis and Malthusian collapse was imminent. Among these pessimists was one Paul Ehrlich, a biologist who warned that population increase had gotten dangerously out of hand.
Ehrlich’s writings generated scepticism in some quarters, however. Economist Julian Simon famously disagreed with Mr Ehrlich’s view and argued instead that rising commodity prices would lead markets to respond, through efficiency, substitution, and supply increases. In 1980, he entered into a bet with Mr Ehrlich: that the price of a basket of five commodities (chromium, copper, nickel, tin, and tungsten) would be lower in a decade’s time, in 1990………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

With a market as sticky as this one is, it is very difficult to short anything. It’s also very difficult to buy any more equities when they are up so much in such a short period. So if you have cash lying around, what do you do?
You can sit on it and wait, which isn’t a bad idea but you can also look elsewhere. You can find other non-equity instruments to purchase where the probability of success is high and the reward-to-risk favorable………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

The CRB Index, an excellent gauge of commodity prices per se, ended a few ticks in the red, nearly unchanged. There was some weakness with the pork complex, feeder cattle and a few soft or tropical markets but otherwise, the session was subdued with the Index appearing dead in the water. But keep in mind that Thursday and Friday of last week, the Index posted impressive, ‘back to back’ gains making yesterday, a day of rest.
Despite the CRB doing little, there were several interesting developments yesterday that I found compelling. For starters, there was front month March oat futures that that hit a high of $4.283/4 a bushel and settled at $4.23, up 183/4 cents. From the low last Thursday of $3.90 to yesterdays high the market has rallied nearly 10%, visiting a level not seen since June, 2011………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

Union Pacific Corporation is one of the leading railroad companies in the United States. Its freight revenues grew by 6% annually in 2012, mainly owing to core pricing gains and higher fuel surcharges, which led to a 7% gain in average revenue per car in 2012. However, its freight volumes in 2012 were almost flat compared to 2011, due to weakness in the coal and agricultural markets.
Going ahead, we feel strong demand within the automotive, chemicals and intermodal segments will continue to fuel growth for the company in 2013. However, challenges in the coal and agricultural markets present headwinds for Union Pacific’s volumes………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

World oil demand growth could fall short of forecasts in 2013, producer group OPEC said on Tuesday, citing economic risks in the euro zone and the United States. The Organization of the Petroleum Exporting Countries in a monthly report left its forecast unchanged for now, still expecting that global oil consumption will expand by 840,000 barrels per day (bpd) this year.
“However, there are a number of downward risks to this growth,” the report from OPEC’s Vienna headquarters said. “The euro’s instability could lead to even deeper recession in some Mediterranean countries………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

OPEC Tuesday cut its estimate of demand for its crude in 2013 to 29.71 million b/d, down 70,000 b/d from its previous projection. In its latest monthly oil market report, OPEC said it estimated the call on OPEC crude in the first quarter of this year at 29.25 million b/d, down from a previous estimate of 29.39 million b/d.
This compares with the group’s actual production in February of 30.311 million b/d, according to secondary source estimates detailed in the group’s monthly report. The adjustment to the call on OPEC matched an increase in OPEC’s estimate of non-OPEC oil supply in 2013 to 53.98 million b/d, up 60,000 b/d from the previous estimate………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

OPEC boosted its crude production to the highest in three months in February led by increased output from Saudi Arabia and Iraq. The Organization of Petroleum Exporting Countries pumped 30.31 million barrels a day last month, the producer group said in its monthly oil market report.
That’s up from 30.24 million in January and is the most since November, according to OPEC estimates based on secondary sources. U.S. supplies will rise to the most in almost three decades in 2013, OPEC estimated………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

The Organization of the Petroleum Exporting Countries cut its forecast of demand for its oil this year, citing growing production from U.S. shale deposits. If the scaled-back forecast proves correct, OPEC could be on track to have its lowest share of the global oil market in more than 10 years.
OPEC’s move comes as industry experts increasingly question whether the producers’ group, which has had a decisive influence on the oil market since the 1970s, can maintain its position amid a boom in U.S. oil production resulting from shale- rock drilling technology………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

OPEC members said Tuesday that demand for their oil in 2013 will be 100,000 barrels a day lower than previously forecast as growing output from non-member countries, particularly North American shale oil, eats into their market share.
The Organization of Petroleum Exporting Countries cut its forecast of demand for its oil this year in line with its revised expectation that non-members will produce an extra 100,000 barrels of oil a day, compared with last month’s forecast. Its outlook for overall global oil demand remained unchanged………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

Its the season for Chinese traders to replenish downstream copper stocks, but while some restocking is expected ahead of summer, price spikes are not, says UBS. According to the bank, the main reason for this is high warehouse stocks that have subdued the price traders are willing to pay for local metal. As a result, it says, writing in a new note titled, ShortKut: Will China Restock? Currently, copper traders in China seem comfortable with the abundance of metal.
“Inventory managers don’t want to run out of stock, but they also don’t want to be caught holding high-cost metal for long periods. Prudent managers of copper inventory are aware of SHFE and LME Asia warehouse stocks, which are at record highs and trending up,” the bank writes. ……………………………………….Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

Iron ore prices remained weak as China mills mostly abstained from purchasing as they are sufficiently stocked with the raw material. Little buying interest was visible towards weekend, reports said.
Iron ore fines 62% fe content at Tianjin port fell 2.9% to $146.3 per dry ton while 58% Fe fell 1.5% to $137.8 per dry ton, according to The Steel Index (TSI). At Qingdao Port, 62% Fe. 2% Al on a 5-day average basis fell 3.4% to $147.4 per dry ton while 63.5%/63% Fe fell 3.3% to $149.1 per dry ton………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

Gold’s worst start to a year in a quarter century and the biggest sales by investors on record are increasing concern that bullion’s longest rally since the end of World War I is ending. Investors sold 106.2 metric tons valued at $5.4 billion from exchange-traded products in February, the most since their creation in 2003, data compiled by Bloomberg show.
Another 26.1 tons was cut since then. Credit Suisse Group AG and Barclays Plc say the 12-year rally will peak in 2013 and billionaire George Soros reduced his stake in the biggest ETP by 55 percent in the last quarter. Prices are within 5 percent of a bear market after the longest run of monthly losses since 1997………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

Gold had a rare banner day in trading markets on Tuesday, as a combination of short covering and hopes for more central bank easing sent the yellow metal to a two week high. Still, traders aren’t sure what’s next for bullion, which has taken a battering since the start of 2013.
Traders rushed to buy back gold after an European Central Bank official suggested monetary easing might continue. That weakened the euro and made bullion appear more attractive as an inflation hedge………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

After trading sideways for several sessions, gold bullion jumped above $1,590 an ounce for the first time this month Tuesday morning in London, in what analysts called a “technical” move after gold broke through a key level following remarks from Bundesbank President Jens Weidmann.
“We see support at the bottom of the sideways range at $1,561 and resistance at the top at $1,586,” said a technical analysis note from Scotiabank. Gold rose above that level however shortly after Weidmann told reporters that the Eurozone crisis “is not over” and said that the Eurozone has “declining inflation risks”………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

Gold rose nearly 1 percent on Tuesday after a top European Central Bank official said the euro zone crisis was not over, but the metal remained vulnerable as redemptions in gold-backed exchange-traded funds continued, analysts said.
Bundesbank’s chief Jens Weidmann, also a member of the ECB Governing Council, also said the German central bank had set aside billions more euros against what it deemed risky ECB moves. The metal briefly rose to almost $1,600 an ounce, a near two-week high. Last week, it had found support in an area near $1,560 an ounce, weighed down by an equities rally and an improving U.S. economic outlook. ……………………………………….Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

The view of the silver market from ten thousand feet away shows what is really going on behind the scenes. The manipulation of the market by deep pocket bullion banks with a hugely concentrated combined naked short position has become increasingly evident.
Furthermore, their market spoofing practices that involve dropping their bids to give the indication of a weak market and then quietly buying back their short positions for a profit are well known………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

After a decade long wait, BNY Mellon has received patents on its commodity exchange traded fund structures, according to a report. The firm received three patents that drive large commodity ETFs, including the popularly regarded SPDR Gold Shares.
BNY Mellon has created grantor trusts to turn physically held gold, silver, platinum and palladium into ETFs that can be traded on an exchange………………………………………..Full Article: Source

Posted on 13 March 2013 by VRS |  Email |Print

The beleaguered US dollar, long forlorn of any vestige of hope by the fiscal and monetary policy-induced abasement characteristic of the last 11 years, is enjoying its strongest multi-week rally since May 2012. Yes, you heard me right: There is currently US dollar strength.
Is this a safe haven play (Credit: “Er, yes?”; Equities: “Of course not!”)? Is the US dollar (USD) stronger on an absolute basis, or is the greenback merely “less bad,” evincing relative strength versus the comparatively miserable constituent contra-currencies comprising the USD Index?……………………………………….Full Article: Source

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