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Commodities Briefing 12.Jul 2013

Posted on 12 July 2013 by VRS |  Email |Print

Commodities climbed for an eighth day, heading for the longest winning run since 2010, after U.S. Federal Reserve Chairman Ben S. Bernanke said the economy will need accommodative monetary policy for the foreseeable future.
The Standard & Poor’s GSCI Index of 24 raw materials increased 0.5 percent to 647.36 by 2 p.m. Singapore time, the highest level since April 3. The daily gains were the longest streak since November 2010, according to data compiled by Bloomberg. Gold rose to the highest in more than two weeks and oil traded near levels not seen in 15 months………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

An end to U.S. monetary stimulus may not necessarily spell doom for commodity prices if a strong U.S. economic recovery boosts demand for oil and base metals, leading commodity managers say, but gold and silver are to be avoided.
Commodities sold off heavily in June following signals from the U.S. Federal Reserve that it would wind down its stimulus programme, as long as the U.S. economy continues to improve. The shift in direction led to investors dumping bonds, a sharp rise in real interest rates and a stronger dollar - all of which clobbered commodity prices, particularly gold………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

As the world’s second largest economy suffers a deepening slowdown, neighboring rival India could be a major benefactor from China’s lackluster performance, say economists.
“India will be less exposed to the trend of a China slowdown, due to limited trade linkage with China, and will likely gain from lower commodity prices and improvement in terms of trade,” Chetan Ahya, India & South East Asia economist at Morgan Stanley wrote in a report published on Wednesday………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

As equity and commodity markets come to terms with the key economic data and policies from major economies across the globe amid possibility of winding down of the US Federal Reserve’s monthly bond buying programme, Marc Faber, a renowned global investor and author of The Gloom, Boom & Doom report tells Puneet Wadhwa in an interview that investors should now pay more attention to the economic developments in China that are likely to have a meaningful impact.
Though cautiously optimistic on the prospects of emerging markets, he would prefer to wait and see on how the economic policies play out………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

Global economic recovery and emerging markets led by China will boost growth of oil demand to a record high total next year, the IEA forecast on Thursday. Next year, consumption by emerging markets will dominate demand overall, a position “they should hold in perpetuity”, the International Energy Agency said.
But the IEA monthly report stressed that the oil market is heading into a sea of “many uncertainties”, partly because oil production in the United States is “set to grow strongly”. Supply from other countries outside the Organization of Petroleum Exporting Countries (OPEC), notably Brazil, Kazakhstan and South Sudan, would also rise and was set for a 20-year record, the agency forecast………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

The North American shale oil boom could spur the biggest rise in non-OPEC supply growth in decades next year, helping meet strong global demand and eroding the market share of OPEC countries, the International Energy Agency (IEA) said on Thursday. Shale oil and gas is already transforming the global energy market, notably by providing cheap supplies to the U.S. economy and lessening its dependence on imports.
Even though global oil demand growth in 2014 will rise to its strongest level since 2010, supply will remain quite comfortable, meaning oil prices should avoid steep spikes, the IEA, the energy adviser to industrialised countries said in its monthly report………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

OPEC has, for years, insisted that it is an economic organization and not a political one. But few observers would disagree with the suggestion that pretty much everything in OPEC is political.
We have seen how politics has complicated the appointments of secretaries general, most recently in the case of Abdalla el-Badri who, despite having ended his second and final three-year term as the organization’s secretary general in December last year, remains in the post. Perhaps the area most overshadowed by politics is that of recording the production of member countries, which is why OPEC uses secondary sources to monitor its crude output………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

After three long years spent apart, Brent and WTI are getting to know each other again. The difference in price between the North Sea and US oil benchmarks – crucial to how crude is traded globally – has shrunk to its narrowest since 2010.
The question for investors is whether this week’s fall in the so-called spread to below $2 a barrel means the prices of Brent and West Texas Intermediate will soon revert to parity. Much rides on the answer………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

A second straight week of dwindling U.S. crude inventories propelled oil prices to their highest in 16 months, pushing Canadian heavy crude prices to levels that are nearly double those seen when the government of Alberta warned of a $6-billion shortfall in energy revenue.
The Canadian heavy crude market is benefiting from both rising U.S. benchmark oil prices as well as unexpectedly narrow discounts to lighter-grade oil. That spread is now around $16 a barrel, compared with a $40 gap last January when fears about insufficient pipeline capacity weighed on producers………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

When I tell people that the best way to conserve energy is to conserve water, I am often faced with a confused response. I’m not surprised really. Energy and water policies are rarely discussed in the same forum.
For a long time, we’ve overlooked the inextricable relationship between water and energy use. Coal, nuclear and natural gas plants use enormous amounts of steam to create electricity. Producing all of that steam requires 190,000 million gallons of water per day, or 39% of all freshwater withdrawals in the nation………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

Gold could lead bull’s charge in the commodities market on Thursday, though it remains to be seen how much the bullishness will extend. Reasons for various commodities gaining could be different and therein lies the doubt since one factor can cancel the other. So, trade with caution.
Overnight, US Federal Reserve Chairman provided gold a booster show by saying that the central bank will be accommodative in approach towards pumping money in the economy to help it grow. This, the market, meant as the $85-billion-a-month stimulus programme will not end soon………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

Investors can expect to see more volatility in gold prices in the next two years as the yellow metal forms a “complicated bottom,” said famed investor and author Jim Rogers. Rogers was one of the keynote speakers at FreedomFest, an annual convention that looks to gather free minds for open discussions on politics and the economy.
Rogers said he doesn’t think that gold has found a bottom despite the fact that prices managed to rally after comments from Fed Chairman Ben Bernanke, who said on Wednesday that a “highly accommodative policy is needed for the foreseeable future.”……………………………………….Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

Background: Gold prices peaked in September 2011 and have dropped over one-third in the past 22 months. Sentiment by almost any measure is currently terrible. Few in the US are interested in gold (although gold is selling well in China), most have lost money (on paper) if they bought in the last two years, and the emotional pain seems considerable. It reminds me of the S&P, gold, and silver crashes in 2008-9.
So, will gold drop under $1,000 or rally back above $2,000? To help answer that question, I examined the chart of gold for the last 25 years and identified several long-term cycles. Then, I constructed a spreadsheet that attempted to model the price of weekly gold based on those cycles and a few assumptions………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

A rebound in the gold price from current levels is building amid increased demand for the physical bullion by China as evidenced by the increase in gold lease rates, says Michael Jones, managing director of gold explorer Invictus Gold.
This year China has imported more than 1400 tonnes of gold or two thirds of the world’s annual production, according to Jones. Physical gold supply as a result is tight, he says, building pressure on the gold price to rise………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

Last week, silver prices continued a painful slump in 2013, closing out a volatile week down $0.66, or 3.4% at $18.74. Gold prices, on the other hand, closed down $373.87 on the week, or 23.4%. The white metal, down roughly 35% year-to-date, has performed worse than gold, which is down about 20% in 2013.
The serious slump in gold prices, tame inflation and record stock market rallies has taken some of the shine out of silver this year. And now we’re getting more questions along these lines from Seeking Alpha contributors: Will the price of bullion go up in 2013?……………………………………….Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

Gold and oil are two of the world’s most heavily traded commodities and both are believed to be inflation bellwethers. Despite all the attention these commodities receive, not all investors are familiar with the gold/oil ratio, but recent fluctuations in the ratio may be saying it is time for investors to get acquainted with just how much oil an ounce of gold buys.
On July 5, an ounce of gold bought 11.75 barrels of oil, the fewest since November 2008 and just below the average of 12.47 barrels since 2000, reports Debarati Roy for Bloomberg………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

French group Ossiam is planning to launch a commodities smart beta fund which should be available from early September, Citywire Global has learned. The Natixis Global Asset Management affiliate is also planning to develop a fixed income product.
The firm’s head of business development Isabelle Bourcier said the upcoming commodity smart beta product would be launched across all major European countries, including the UK, France, Germany and Italy………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

The NASDAQ OMX Group, Inc. announced exchange-traded product (ETP) provider BOOST ETP will launch nine new exchange-traded products (ETPs) in the United Kingdom (UK) that are based on indexes in the NASDAQ Commodity Index FamilySM. They are the second set of BOOST ETP products linked to the NASDAQ Commodity Index Family and the total number of BOOST’s ETPs on this Family increases to 25.
“The introduction of these commodity ETPs reaffirms the success of our index construction and our rules-based, objective and transparent index methodology,” said John Jacobs, NASDAQ OMX EVP and Head of NASDAQ OMX Global Indexes. “BOOST ETP has again succeeded in leveraging our indexes to quickly and efficiently develop innovative products for a wide range of investors.”……………………………………….Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

U.S. corn production is rebounding the most in two decades as farms recover from last year’s drought-plagued harvest. Hedge funds are bearish on prices for the first time since 2010. Output this year will jump 29 percent to a record 13.95 billion bushels (355.2 million metric tons), the biggest increase since 1994, the U.S. Department of Agriculture said today in a report.
That will add enough grain to supply the 28-nation European Union and Japan for a year and more than double U.S. inventories before the harvest in 2014. Futures will drop 9.4 percent to $4.75 a bushel in three months, the lowest since October 2010, Goldman Sachs Group Inc. estimates………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

Making millions and retiring in your 30s is every investor’s dream. But for legendary commodities trader Jim Rogers, it was just the beginning of a career on Wall Street that has spanned six decades and produced a net worth in the hundreds of millions.
Rogers’ amazing success was built on his uncanny ability to spot long-term trends well before the masses, earning him a reputation as a contrarian. But now, after “retiring” at 37, scoring huge gains in commodities in the early 2000s and correctly predicting the financial and housing crisis, Jim Rogers has his sights set squarely on what he calls one of the greatest opportunities he has ever seen………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

War-battered Syria moved Thursday to protect its battered currency, proposing new laws to criminalize dealings in other nations’ bank notes. The new statutes would subject violators to fines and prison terms of up to 10 years, state media reported.
The move comes as concern mounts about the plummeting value of the Syrian pound and the use of the U.S. dollar in its place. With the Islamic fasting month of Ramadan having begun, some Syrians say they are having difficulties buying sufficient food………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

Australia has been drafted in to help design an emissions trading scheme for China, the world’s biggest polluter. A deal announced in Canberra on Thursday will see the Australian National University take leadership of a program that will analyse pollution data provided by China and allow Chinese university researchers to examine Australia’s experience of the carbon tax and transition to an emissions trading scheme.
China is aiming for a full national emissions trading scheme by 2015………………………………………..Full Article: Source

Posted on 12 July 2013 by VRS |  Email |Print

After a 30% sell-off in grains the last 7-9 months, worries about heat and dryness in the far western belt has returned. Our bearish longer-term stance in grains, since last fall and winter, is at the mercy of “what happens” to corn and soybean crops in Iowa, Nebraska and Kansas the next 4-8 weeks and whether or not heat and dryness expands further east into Illinois and Missouri.
Sunday night we began alerting clients to our “less bearish attitude” in grains and that soon the corn and soybean market would take “psychological” notice of a ridge of hot high pressure that is redeveloping over the Midwest and Plains………………………………………..Full Article: Source

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