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Commodities Briefing 06.Nov 2013

Posted on 06 November 2013 by VRS |  Email |Print

The U.S. derivatives regulator on Tuesday reintroduced a plan to curb commodity market speculation, reviving a crucial Wall Street reform after a judge knocked down an earlier version of its rules on position limits.
The Commodity Futures Trading Commission proposal will set caps on the number of contracts that a single trader can hold in energy, metal and agricultural markets, a measure aimed at capping speculation that some blamed for the spike in raw material and food prices prior to the 2008 financial crisis………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

In 1979, Nelson Bunker Hunt and William Hunt famously bought up as much silver as they could in the commodities market. By the time they were done, the brothers had acquired more than a third of the world’s supply of silver, sending the price of the precious metal soaring.
Citing the Hunt brothers’ attempt to corner the market more than three decades ago, the Commodity Futures Trading Commission on Tuesday voted 3 to 1 to limit the size of any trader’s footprint in the commodities market………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

Commodities are and always will be a cyclical market, asserts Chris Berry of House Mountain Partners. That’s why he’s not sweating disappointing stock performance and flat pricing environments. But the self-described long-term bull on energy materials has big plans on how to play growth in the developing world, and he insists that now is the time for investors to position themselves ahead of an upswing.
I believe we’re at the bottom of the cycle for the commodities. It’s been a rough 18 to 24 months for the juniors, but the worst is likely behind us. That said, I don’t think we have turned the corner yet toward a new growth cycle………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

Commodities in general continue to find little to cheer about at the moment and this is reflected in our momentum indicator with just three out of 16 commodities holding onto positive momentum. Seasonal slow demand for oil, increased supply of agricultural commodities at a time of tepid growth are some of the current negative drivers.
In addition, some renewed dollar strength means that even the metal sector has succumbed to profit taking while we await news from the European Central Bank on Thursday and the US job market on Friday. The metal sector was supported up until last week by speculation that tapering in the US would be further delayed together with the weakening US dollar………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

The past year has not been a good one for commodity investment. Passive commodity indexes have delivered disappointing returns, while a number of high-profile commodity hedge funds have been forced to close. What is the outlook for investor interest in commodities?
It’s been a tough year for commodity investment. The broad gains in commodity markets seen during recent years – dubbed the commodity ’super cycle’ – seem to have come to an end, and investors have been left holding the bag. Strategies that produced results during the boom years have increasingly failed to find the same returns, and market participants say the mood of investors towards commodities has noticeably changed………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

Commodities capped the longest slump in seven months, paced by energy and agriculture, on signs of ample supplies of crude oil and grains amid increasing speculation that the Federal Reserve will scale back stimulus.
The Standard & Poor’s GSCI Spot Index of 24 raw materials declined 0.6 percent to settle at 606.77 at 3:42 p.m. New York time, the sixth straight decline and the longest skid since April 5. Earlier, the measure touched an 18-week low at 606.39. West Texas Intermediate crude was the cheapest in four months, and corn extended a slide to the lowest since August 2010………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

As in the second quarter of the year, third quarter results for the oil majors, the international oil companies and other major listed operators, were disappointing. Some were downright awful. Why have results for the oil companies deteriorated so markedly, and what should we expect in the future? In this article, we’ll look primarily at upstream liquids — primarily crude oil production.
Historically, when crude oil consumption has reached 4.25% of GDP in the US, the consumer has chosen to reduce consumption rather than accept further price increases. This number represents a Brent oil price of $103 / barrel……………………………………….Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

Every week, the U.S. Department of Energy (DOE) reports figures on crude inventories, or the amount of crude oil stored in facilities across the United States. Market participants pay attention to these figures, as they can indicate supply and demand trends.
If the increase in crude inventories is more than expected, it implies either greater supply or weaker demand and is bearish for crude oil prices. If the increase in crude inventories is less than expected, it implies either weaker supply or greater demand and is bullish for crude oil prices………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

Some members of the OPEC cartel saw their production levels decline but overall production has been relatively static, a brief from CPI Financial said. CPI reported Tuesday Kuwait and the United Arab Emirates saw crude oil production levels decline in October by 150,000 barrels of oil per day and 100,000 barrels of oil per day, respectively.
The report said total oil output for members of the Organization of Petroleum Exporting Countries was static in October at 30.6 million bpd. CPI said Saudi Arabia’s output was level at 10 million bpd while Iraq erased a September decline with an October production increase of 280,000 bpd………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

Forty years ago, Egypt crossed the Suez Canal to begin a war that killed some 27,000 people and left the nation of Israel fighting for its life. When it was over, after much U.S. support, Israel had won. But the effects of the war are still being felt in America and elsewhere.
The key effect was the first so-called OPEC oil embargo, an act of vengeance aimed at the U.S. and its allies for supporting Israel. Its short-term results were the indignity of gas-station lines, improvised alternate-day rationing and even the banning of Christmas lights (in Oregon)………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

Although gold futures are down about 20% this year at around $1,309 an ounce, they could be headed to $1,500 an ounce, according to Bank of America Merrill Lynch’s head of global technical strategy, MacNeil Curry.
Curry says his view on gold recently changed from bearish to bullish due to technical factors. “The impulsive gains from the $1,251 low of Oct. 15…say a medium-term base and bullish turn is unfolding,” he said in the note. “We look for an ultimate break of the $1,433 highs of Aug. 28, with potential for a push to $1,500/$1,533 long-term resistance. In the next several sessions we would buy a dip into $1,309.”……………………………………….Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

Investors in gold mining companies should resist the temptation to jump back into the market just because companies are cutting budgets and delaying projects, an investment analyst said Tuesday.
Chris Gaffney, a senior market strategist for EverBank Financial Corp. who specializes in precious metals, said the key to buying gold mining stocks is the price of the commodity, not changes in company budgets………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

Gold is on track for its first annual loss in 13 years, but demand from buyers rose last month. Appetite for buying gold among individual investors rose to a six-month high in October, according to an index.
BullionVault, the world’s largest online market for buying physical bullion, said its index – which measures the balance of customers adding to their gold holdings over those who reduce them – rose to 54.3 last month from 53.0 in September………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

Demand to buy silver amongst Indian households has pushed the country’s imports of the precious metal to twice last year’s level and may set a record in 2013, according to industry experts.
Between January and September, silver imports to India totaled more than 4,000 tonnes, already beating full-year 2012 says the Thomson Reuters GFMS consultancy. The world’s largest end-consumer of silver bullion as well as gold, India’s current record demand to buy silver came at just over 5,000 tonnes in 2008………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

The precious metal space has been under pressure for much of 2013 as safe haven assets were shunned in favor of high growth products. Hopes of Fed tapering had further put pressure on precious metals as the dollar continued to gain strength.
However, the Fed decision of ‘No Taper for now’ once again bought life back to precious metals. While gold and silver bounced back to trade higher, one metal which may have been overlooked by investors during this trend towards a reversal is palladium………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

Across the materials space, investors have seen solid trading in a number of names. This has been particularly the case in the steel industry, as this segment has surged as of late thanks to some positive trends in the space.
Among the top reasons for this jump are the focus on higher beta names, and the risk-on atmosphere in the market. Additionally, thanks to a lack of QE tapering, markets are once again embracing commodity-linked investments, further adding to the bullish trend………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

China’s corn harvest is poised to decline for the first time in four years after flooding in its biggest-producing province and drought in its fifth largest cut yields, easing a global glut as the U.S. reaps a record crop.
Output by the world’s second-biggest corn grower fell 3.2 percent to 199.1 million metric tons, according to SGS SA, which carried out 302 interviews in the seven largest growing areas during the harvest in September and October for Bloomberg………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

Conditions already exist for abuse by collective computational power to cause breakdown in digital currency, say researchers. The bitcoin digital currency could be hijacked by “selfish miners” causing honest users to lose time, effort and money.
Due to the way the anonymous, decentralised, peer-to-peer digital currency is produced through complex computational processes, a rogue group of “selfish miners” could hijack the currency and overwrite the shared record of transactions. That would wipe out the bitcoins belonging to honest users and possibly cause a collapse in the currency, say two researchers from Cornell University………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

Carbon taxes and emission trading systems are the most cost-effective means of reducing CO2 emissions, and should be at the centre of government efforts to tackle climate change, according to a new OECD study.
Effective Carbon Prices shows that taxes and trading systems are preferable to other policies, such as feed-in tariffs, subsidies and other regulatory instruments. For example, the average cost of reducing a tonne of carbon emissions in the road transport sector can be up to eight times higher when instruments other than fuel taxes are used, according to the report………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

John Howard says Tony Abbott’s victory was founded on climate scepticism and global deal on emissions will never be reached. John Howard has told an audience of climate sceptics in London that Tony Abbott’s defiance on global warming in the face of left-wing zealotry was the foundation of his electoral victory in September.
In a lecture at the Global Warming Policy Foundation, established by former Thatcher minister and climate sceptic Nigel Lawson, the former Australian prime minister insisted that the high tide of public support for “overzealous action” on global warming has passed………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

One of Australia’s largest business groups says consumers may not see a big difference in the price of many products when the carbon tax is removed. The Federal Government has asked for public feedback on legislation aimed at getting rid of Labor’s carbon tax.
In its submission, the Australian Industry Group says apart from electricity, many price changes are likely to be limited. It says many businesses were not able to pass on the cost of the carbon tax in the first place………………………………………..Full Article: Source

Posted on 06 November 2013 by VRS |  Email |Print

Top envoy to UN negotiations on global emissions pact stresses compromise amid domestic concern about worsening air pollution. Beijing intends to be “flexible” in UN global climate talks, the country’s top negotiator said yesterday, while adding that getting rich nations to keep pledges to fund mitigation steps by poorer countries would be key to a deal.
Representatives of more than 190 nations will gather in Warsaw on Monday to push towards a new global deal to cut climate-warming greenhouse gases. The deal would take effect by 2020………………………………………..Full Article: Source

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