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Commodities Briefing 10.Feb 2014

Posted on 10 February 2014 by VRS |  Email |Print

Some of the world’s biggest commodities traders will take a strong line against a new plan to limit market speculation, arguing it would derail the everyday business of buying and delivering shipments of grain, oil and metals.
A lobby group representing companies including Archer Daniels Midland, BP, Cargill and Louis Dreyfus Commodities intends to file a sweeping critique of the “position limits” rule proposed by the US Commodity Futures Trading Commission in formal comments due on Monday, according to a draft letter seen by the Financial Times…………………………….Full Article: Source

Posted on 10 February 2014 by VRS |  Email |Print

Global food prices fell 1.3 per cent last month from December levels on large supplies of oils, sugar and cereals, according to the United Nations food agency FAO.
“We are seeing lower prices due to abundant supplies, but stronger upturn in demand, such as an increase in the pace of imports from Asia, could limit the decline,” said FAO economist Abdolreza Abbassian. The Food and Agriculture Organisation (FAO) price index measures monthly price changes for a basket of cereals, oilseeds, dairy products, meat and sugar…………………………….Full Article: Source

Posted on 10 February 2014 by VRS |  Email |Print

Commodities witnessed a strong beginning in February with the agri-commodities and metals providing optimism while gold stock markets stabilised after a weak beginning, according to Ole S Hansen, Head of Commodity Strategy at Saxo Bank.
Copper received its first weekly gain on recovery trends in US economy while Shanghai copper rose ater markets returned after a week long Lunar New Year holiday. London Metal Exchange ware houses witnessed shrinking of inventory - with copper falling to 308,000 tons, the lowest in 13 months and less than half of he June 2013 peak of 678,000 tons…………………………….Full Article: Source

Posted on 10 February 2014 by VRS |  Email |Print

Oil smuggling reared its ugly head last year as Shell Companies in the Philippines noted discrepancies in its computations and the actual retail prices. “There was a movement last year. Toward the end of the second quarter and then third quarter of 2013, smuggling came back.
We suspect that people were anticipating the revamp [at the Bureau of Customs],” said Shell country manager Edgar O. Chua. “Our sales fell and the retail prices fell. But if you compute it, and you compute the supposed landed cost, you’ll see that some players are selling at much lower prices. That’s because they don’t have the 12-percent value added tax.”……………………………Full Article: Source

Posted on 10 February 2014 by VRS |  Email |Print

It’s Non-Farm Payrolls Data Day today, yay! Another day where analysts and commentators try and guess what the key numbers will be and how the Fed will react.
We’ve been through this enough times together to know that if the number is as predicted, or better than then there will be much speculation/expectation that the FOMC will push on with tapering at the current rate. This is likely to hurt the gold price in the short-term. Jobless data released yesterday did not disappoint…………………………….Full Article: Source

Posted on 10 February 2014 by VRS |  Email |Print

The gold price was down 15–30% in various currencies that we track in 2013, mostly due to investment underpinned by ETF outflows. Financing risk for the junior mining sector was highly elevated, to say the least, in 2013 and remains a source of uncertainty in 2014.
To reduce the risk of financing a project, we seek projects that generate double-digit returns in the current pricing environment. We also look for management teams with the technical capacity to not only build and operate a mining project, but also to successfully execute the business plan, which includes permitting the project and attracting good personnel…………………………….Full Article: Source

Posted on 10 February 2014 by VRS |  Email |Print

Hallgarten & Company’s Christopher Ecclestone suggests, “The storm of the last two years has winnowed the wheat from the chaff (largely) in the REE space.” “The two bulk producers managed to get into production after a titanic struggle and have been rewarded for their perseverance with relatively lowly market caps,” he noted, adding that the fact Lynas and Molycorp have started churning out light rare earths products “are undermining Chinese dominance in some metals.”
Meanwhile, “Tensions between Japan and China over disputed islands may yet be the touchpaper to set REEs and other specialty metals alight,” he speculated…………………………….Full Article: Source

Posted on 10 February 2014 by VRS |  Email |Print

Silver prices, which jumped the most in more than four months yesterday, may extend a rally today as signs that the U.S. economy is slowing boosted the appeal of haven assets.
U.S. companies boosted payrolls by 175,000 last month, trailing the 185,000 projection in a Bloomberg survey, ADP Research Institute said yesterday. The data added to economic concerns after a private report this week showed factories expanded in January at the weakest pace in eight months…………………………….Full Article: Source

Posted on 10 February 2014 by VRS |  Email |Print

Market indicators are spelling out a bad year for copper producers as the world’s biggest consumer, China, appears unlikely to eat up excess supply. Copper prices dropped in late January on weak Chinese manufacturing data. Then US data dragged prices down further, adding to a 10-day losing streak for the metal.
Economists are predicting that in 2014 China will experience its slowest nominal growth since 1990. Every number that comes out of China lately is worse than the time before, Bloomberg Industries’ Kenneth Hoffman said last week…………………………….Full Article: Source

Posted on 10 February 2014 by VRS |  Email |Print

Prices of copper - the bedrock industrial metal and a benchmark for gauging the strength of the global economy - are likely to soften further in the coming year as production growth is expected to exceed that of consumption. However, any weakness may be cushioned by steady demand on the mainland.
The price of the benchmark three-month forward contract on the London Metal Exchange may average US$7,078 a tonne this year, 3.7 per cent lower than last year, according to the average estimate of 28 analysts polled by Bloomberg. Prices have fallen 16.7 per cent in the previous two years amid global economic weakness…………………………….Full Article: Source

Posted on 10 February 2014 by VRS |  Email |Print

It looks likely that one day the yuan will become too strong for China’s economy to bear and will lead to a depreciation of the currency. In an age of uncertainty, one of the few apparently safe bets has been that China’s currency, the yuan, will continue to appreciate in value.
After all, despite a modest slowdown, China is still growing at a much faster pace than any other major economy. And as members of the US Congress keep telling us, the yuan is fundamentally undervalued, and really ought to strengthen…………………………….Full Article: Source

Posted on 10 February 2014 by VRS |  Email |Print

A number of new entrants, such as bitgem, catcoin, unobtanium and sexcoin, have arrived on the scene even as regulators across the world grapple with risks posed by such currencies and transactions conducted through them.
At least 93 virtual currencies are at present being used by people across the world over the internet, as also for some offline transactions, and their total valuation has reached $13 billion (over 80,000 crore), out of which bitcoin alone accounts for over $9 billion, according to market estimates…………………………….Full Article: Source

Posted on 10 February 2014 by VRS |  Email |Print

Stronger Pacific Ocean winds may help explain the slowdown in the rate of global warming since the turn of the century, scientists said.
More powerful winds in the past 20 years may be forcing warmer seas deeper and bringing cooler water to the surface, 10 researchers from the U.S. and Australia said yesterday in the journal Nature. That has cooled the average global temperature by as much as 0.2 degree Celsius (0.36 Fahrenheit) since 2001…………………………….Full Article: Source

Posted on 10 February 2014 by VRS |  Email |Print

A coalition of businesses and NGOs has accused the Treasury of hypocrisy over its refusal to use proceeds from carbon taxes to insulate the UK’s housing stock.
A new report, authored by an ex-Treasury economist for campaign group Energy Bill Revolution, made up of nearly 200 UK charities, businesses, unions, consumer and health groups, highlights how the Treasury’s decision to retain proceeds from emissions trading and the carbon floor price is something of an anomaly…………………………….Full Article: Source

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