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Commodities Briefing 03.Sep 2013

Posted on 03 September 2013 by VRS |  Email |Print

Commodities beat bonds, stocks and the dollar for a third month, the longest winning streak in two years, as the prospect of military strikes in Syria boosted oil and gold. Emerging markets declined as currencies plunged from Brazil to Turkey to India.
The Standard & Poor’s GSCI Total Return Index of 24 raw materials rose 3.4 percent in August as U.S. crude reached a two-year high and gold rallied close to a bull market. The MSCI All-Country World Index (SPX) of equities in 45 markets fell 2 percent including dividends and the U.S. Dollar Index, a measure against six trading partners, gained 0.8 percent………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

Crude oil turned positive and gold pared overnight losses in London on Monday as encouraging economic data from China provided a tailwind for prices. A positive tone prevailed in foreign exchange, with currencies in emerging markets and others perceived as risky bets such as the commodity-linked currencies of Australia and New Zealand gaining ground against the dollar.
Brent crude for October delivery gained 0.3% to $114.37 a barrel on ICE Futures Europe. U.S. crude markets are closed for the Labor Day holiday. Spot gold was down 0.4% at $1,389.90 a troy ounce………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

Brazil’s commodities exports including sugar, corn, coffee and iron ore rose in August compared with July while soy shipments eased now that the harvest is over, the Trade Ministry said on Monday.
Dry weather in recent weeks helped harvesting and loading of a record sugar cane crop, and 44 percent more sugar was exported in August than in the previous month. Brazil finished harvesting a record soybean crop in May and exported 5.4 million tonnes of the crop in August, slightly below the amount exported in July but twice the amount exported in August of 2012 when drought hurt production………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

Australia’s export commodity prices edged higher in August, the second rise in a row, following a run of four monthly falls. The main contributors to the monthly rise in the Reserve Bank of Australia’s foreign currency commodity price index were iron ore and gold.
Base metals prices also increased, although the prices of many rural commodities declined in the month, the RBA said. Commodity prices peaked in July 2011 and are still down by 22 per cent, despite the minor rises in July and August………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

Sinopec is buying up assets around the world, racking up over $22 billion in oil and gas asset deals since 2010 in the UK, US, Canada, Brazil, Argentina, Australia and Egypt. Recently, Sinopec said it would purchase a 10% stake in Marathon Oil Corp’s oil and gas field in Angola for $1.5 billion—it’s second purchase in this field in the past two years. It also scooped up stakes in five US shale venues this year.
One of its biggest deals was its purchase of a stake in Portugal’s Gal Energija Brazil holdings for $5.19 billion in November 2012………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

As the Obama administration wrestled this week, more or less in public, with its options for responding to a poison gas attack in the Damascus suburbs, one consideration was conspicuously absent: the potential effect on oil prices.
We may look back on this moment as a waypoint marking a shift in the balance of geopolitical power, one that favors America and its allies and weakens Middle East autocracies, along with Russia, which is Syria’s chief apologist. (Whether the current administration is prepared to take advantage of this power shift is another matter.)……………………………………….Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

OPEC’s oil production fell to its lowest level since June 2011 in August as protests at many of Libya’s key oil exporting ports saw the country’s output half. Crude-oil production from the Organization of Petroleum Exporting Countries averaged 30.170 million barrels a day in August, down about 165,000 barrels a day from 30.335 million barrels a day in July.
An increase in Saudi Arabia’s output to 9.975 million barrels a day, the Kingdom’s highest level since June last year according to data compiled by the Wall Street Journal, wasn’t enough to offset substantial declines in Libya’s production as strikes and protests roiled the country’s oil industry………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

One of my favorite books is “Making Money” by Terry Pratchett. In it, a former con man, Moist von Lipwig, is put in charge of the mint by the city’s benevolent dictator. He is opposed by the head clerk of the bank, Mr. Bent — who is all about the virtue of gold. Mr. Bent insists that acurrency must be backed by gold in order to be truly legit.
On the other hand, Moist believes that it’s OK to print money. And as long as it goes ’round and ’round, everything will be fine — whether or not there’s actual gold in the bank’s vault………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

Gold forward offered rates turned positive for the first time in eight weeks in London, lowering one-month bullion borrowing costs to an almost two-month low.
The one-month gold forward offered rate, which shows the interest rate at which dealers will lend metal for dollars, was at 0.00167 percent today after remaining negative since July 8, data compiled by Bloomberg show. The one-month lease rate fell to 0.1809 percent, the least since July 5………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

Go for gold and get richer faster. That’s the message from ABC Bullion who say investing in precious metals could double your money in half the time it will take to earn the same amount in an interest earning savings account.
And if you ask precious metal experts they will also says now is a golden time to start investing. According to ABC Bullion Chief Economist Jordan Eliseo there’s never been a better time for the average Aussie to start cashing in on gold………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

An imminent attack on Syria is looking less likely today and gold has reacted accordingly, falling below $1,400 this morning. It no longer appears as though it is heading for its second-monthly gain. Meanwhile silver is still aiming for its best month since January 2012.
Whilst talks of Syria appear to have calmed, I suspect the price of gold will find some support from discussions surrounding Syria, given Obama’s stance that they will act without UN support………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

The massive debt bubble created by our monetary system is about to burst. The demonetization of gold and silver, has over the years diverted value from these metals, to all paper assets (such as bonds) linked to the debt-based monetary system.
The process of the devaluation of gold and silver, started by the demonetization of gold and silver, is about to reverse at a greater speed than ever before. This is similar to what happened during the late 70s, when the gold and silver price increased significantly. However, what happened in the 70’s was just a prelude to this coming rally. The 70’s was the end of a cycle, this is likely the end of a major cycle; an end of an era of the debt-based monetary system (dishonest money)………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

The biggest rally in copper in three months is reversing as analysts predict that the largest glut in 13 years will overwhelm consumption from an accelerating Chinese economy, which uses two in every five tons.
Production will exceed demand by 408,000 metric tons next year, the most since 2001, compared with 167,000 tons in 2013, the average of 15 analyst estimates compiled by Bloomberg shows. Futures rose 3.2 percent in August, the most in three months, on signs of an expansion in Chinese manufacturing. Prices will drop 6 percent to $6,800 a ton by the end of December, the median of 13 analyst and trader predictions shows………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

Investor positioning in copper has returned to neutral, signalling the end of a short-covering rally, analysts at Deutsche Bank said in a note on Monday September 2.
“We think better-than-expected data out of China may be the next catalyst, but our preference remains for metals where over-capacity is less of an issue, hence our preference for copper and zinc, over nickel and aluminium,” they said. ……………………………………….Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

Increasing freight rates, driven by higher volumes of iron ore and coal, are likely to cause a rise in transportation costs and delivered prices for other commodities such as bauxite, alumina, copper concentrate, and nickel ore, analysts at JP Morgan said in a note on Monday September 2.
This could then feed through to refined metal via cost-push pressures, the analysts said, and among the base metals, data suggest nickel – especially the nickel contained in Chinese nickel pig iron production (NPI) – has the greatest exposure to possible changes in ocean freight rates………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

Market regulator Sebi has clamped down on new launches of gold exchange traded funds (Gold-ETFs) as the product is seen to be fueling demand for the yellow metal and contributing significantly to the current account deficit. The market watchdog has turned down a number of applications for new gold ETFs though there is no formal change in the policy for these instruments that allow paper-investing in gold.
“All gold ETFs have to backed by physical gold and thus new products can also fuel demand…There is no policy decision but no new products are being approved,” a Sebi official said………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

Swiss & Global Asset Management is set to launch four commodities funds on October 1 that will buy and store quantities of aluminium, copper, nickel and zinc. The JB Industrial Metals Funds aim to deliver the price performance of the metals after safekeeping, insurance and management fees.
“We store the metals in various warehouses around the world and are able to reduce costs by constantly monitoring where demand, and therefore storage costs, are lowest; and adjusting locations accordingly,” says Stephan Müller, product developer of industrial and precious metals funds at Swiss & Global Asset Management………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

European investors’ sentiment “reversed” during July 2013 with a return to long-term funds following a month of massive outflows in June, says Morningstar.
The latest Morningstar Direct Asset Flows Commentary for Europe shows inflows of €26.8bn (£22.7bn) for European open-ended funds during July, compared with outflows totaling €35bn over the course of the previous month………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

FMC has also directed the exchanges to ensure that all the existing FMC accredited warehouses get registered by 31 Dec. Commodities markets regulator Forward Markets Commission (FMC) on Monday said commodity future exchanges are responsible for ensuring the settlement of outstanding forward contracts by way of delivery.
Forward Contract Regulation Act, 1952, requires all forward contracts to be delivery-based. Without mentioning any exchange, FMC said “it has been observed that some of the exchanges have issued circulars to their trading members and other market participants in which conscious efforts have been made to evade their prime responsibility of ensuring quality and quantity of commodities as per the prescribed contract specification, and to pass on the entire onus to the warehouse service providers, which is not correct”………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

Ask currency analysts about the yuan, and the chances are they will tell you two things. First, they will say that despite appreciating 35 per cent against the US dollar over the past eight years, China’s currency is still undervalued.
Second, they will tell you that in their determination to internationalise the yuan, policymakers in Beijing have been busy dismantling China’s remaining capital controls, and that for most intents and purposes, the currency is now freely convertible. They are wrong on both counts………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

Companies in exposed parts of Asia are facing a debt-repayment crunch as plunging local currencies make it more costly to repay foreign loans, a situation that is exacerbating stresses on the region’s economies.
Asian companies took out sizable foreign loans in recent years as the U.S. Federal Reserve kept interest rates low and printed money. For companies in nations like India and Indonesia, rates on U.S.-denominated debt were more attractive than local borrowing costs………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

The Israeli shekel is a haven among emerging market currencies and any Syria-related weakness is a buying opportunity, Societe General SA said. Better-than-forecast economic growth in the second quarter and expectations that Israel’s interest rate differential with major economies won’t narrow in coming months are fueling shekel gains.
Israel’s economy is set to expand 3.5 percent in 2014, faster than the 3 percent forecast for Russia and the 2.5 percent estimate for Poland, according to economist estimates compiled by Bloomberg………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

It is wondrous how the threat of climate change, a clear sign of the excesses and limitations of advanced economies, could ever become a driver of grand visions of progress in the developing world. But that is precisely at the root of a phenomenon that is ushering in a transformation of African agriculture.
Consider how the discourse of energy crisis and resource limits in wealthy countries — underlined by fossil fuels’ contribution to climate change — has spawned a rush for African farmland for biofuel production, which in turn is being touted “green growth” in the global south………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

The US government is struggling to shore up the domestic sugar market as it tries to stave off federal loan defaults by sugar processors for the first time in nine years. Strong domestic production, a surge in imports from Mexico as well as weak international prices have weighed on the US sugar market this year.
In its third intervention in the domestic market this year, the US Department of Agriculture last week said it bought sugar from a domestic processor and sold it to an ethanol producer at a loss of almost $3m………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

Talks at the U.N.’s aviation body must bridge a deep divide between developed and emerging nations over airline emissions to avert the threat of a carbon trade war with the European Union.
After more than a decade of debate at the International Civil Aviation Organization (ICAO), there is little sign emerging powers China and India are ready to pay to pollute………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

The European Union plans to present a change to its emissions curbs on airlines in the first half of October that will take into account a decision later this month by the United Nations on whether to pursue global measures to cut pollution by the industry.
The European Commission, the EU’s regulatory arm, is considering limiting carbon-dioxide discharges by flights into and out of the 28-nation bloc only in European air space, according to two people with knowledge of the matter. The final proposal will depend on the outcome of the vote by the UN aviation agency, said the people, who asked not to be identified, citing policy………………………………………..Full Article: Source

Posted on 03 September 2013 by VRS |  Email |Print

Tony Abbott has returned to his attack on Labor’s carbon tax, claiming the cumulative cost of the policy in terms of the loss in gross domestic product to 2050 would be $1 trillion.
In his last address to the National Press Club before the election, the Opposition Leader also argued that even by the government’s own projections, Australia’s domestic emissions would hardly decrease at all………………………………………..Full Article: Source

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