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Commodities Briefing 24.Mar 2014

Posted on 24 March 2014 by VRS |  Email |Print

Energy production will increasingly strain water resources in the coming decades even as more than 1 billion of the planet’s 7 billion people already lack access to both, according to a United Nations report.
“There is an increasing potential for serious conflict between power generation, other water users and environmental considerations,” said the UN World Water Development Report published today that focused on water and energy. Ninety percent of power generation is “water-intensive,” it said………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

It’s not easy being a farmer in the U.S. these days and it’s bound to get harder, say those who should know. “There’s a growing discontent among the farming community,” said John Kempf, a fruit and vegetable farmer in northeast Ohio.
“We have a farming model now that is antagonistic to the enjoyment of watching seeds grow and seeing a new born animal,” said the 26-year-old Kempf, who is chief executive of Advancing Eco Agriculture, a farming and crop nutrition consulting company………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

Oil prices are in for a slide. With growing global conventional and non-conventional output and slowing consumption growth, lower oil prices seem a certainty. China has been the constant, the sole star performer in the global economic stage, all these recent years. But things seems to be changing there too.
Trend growth is slowing down and markets have been shaken up by the actions of the People’s Bank of China, endeavouring to tame a virulent credit boom. In the first two months of 2014, industrial confidence and output indices, retail sales, fixed asset investment and credit creation, all were weaker than anticipated………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

High capital expenditure, lesser productivity has caused oil majors in shale plays to complain of diminishing returns to capital. Barclays said in a report that technological breakthroughs could help make the projects more economical.
“Service companies outlined major technological breakthroughs, some of which are already commercialised or will be commercialised in the next two years. Schlumberger is focusing on making the fracturing process more efficient…Technologies including BroadBand and HiWAY will help improve recovery rates by improving how operators target the most productive parts of the wellborne which will improve the economics,” Barclays report said………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

Goldman Sachs Group Inc. and Societe General SA can thank Janet Yellen for helping to get their bearish forecasts for gold back on track.
After hedge funds piled into the precious metal this year with the most bullish bets in 16 months, defying the predictions of lower prices by Goldman and SocGen, gold tumbled last week by the most since November as Federal Reserve Chair Yellen said economic stimulus could end this year, with interest rates starting to rise in early 2015………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

Gold’s rally hasn’t convinced Goldman Sachs to change its bearish thinking on the precious metal. Gold has been one of the top performers across asset classes this year, up 11%, but Goldman says unsustainable catalysts have driven the rally. The firm doesn’t believe the recent gains are sustainable.
Three factors — weather-impacted U.S. economic activity, Chinese credit concerns and Ukraine tensions–have played a role in pushing gold prices higher in 2014. But Goldman sees these factors diminishing in the near future, which will prompt gold to tumble off current levels………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

Gold rose 1%, it’s first rise in five days, trimming a weekly decline of 2.8%, as the crisis over Ukraine led to a renewed safe haven bid for gold. Palladium surged 3.1% to the highest since 2011 on concern supply from Russia may be restricted.
Gold had become overbought after its surge to 6 month highs and was due profit taking and a correction. A perception of an abatement of tensions between Russia and the West has contributed to the pullback this week. Momentum could lead to further falls next week but we expect weakness will be short lived………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

Palladium prices have jumped to their highest level in two years on fears that top exporter Russia will retaliate against US sanctions by cutting exports of the precious metal.
Palladium for June delivery, the most actively traded contract, rose as much as 3 per cent, or $US24, to $US800 a troy ounce on the New York Mercantile Exchange, its highest level since September 2011. The contract closed at $US789.30 an ounce………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

Palladium futures touched $800 an ounce Friday on news that two physically backed exchange-traded funds will launch in South Africa next week, creating expectations for increased demand for the metal.
This comes when the market is already worried about constrained supplies due to the combination of a strike in the South African mining sector and potential for sanctions against leading producer Russia, traders and analysts said………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

With China power grid spending showing strong growth of 22% year-on-year the first two months of 2014, investors worried over fallng prices could see some recovery in demand and improved market sentiments, according to Barclays.
Once the new grid investments translates into orders, copper consumption could improve and offset some of the losses from property sector, the report said………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

Iron ore has steadily rebuilt on price over the last two weeks, in the wake of an 8 per cent drop that left miners quaking in their steel-capped boots. Steel Index data showed that 62 per cent fines finished the week at Tianjin port at $110.70 per tonne.
This price is still down 17.5 per cent on the start of the year, and despite the recent recovery, independent research house Capital Economics senior commodities economist Caroline Bain has predicted the price will drop to $95 by the end of the year, and $85 the following year………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

As energy production puts a strain on water resources in the coming decades, usable water will become an increasingly limited commodity. Investors can capitalize on the global thirst for water with exchange traded funds that focus on conservation and purifying potable water.
“There is an increasing potential for serious conflict between power generation, other water users and environmental considerations,” according to the UN World Water Development Report, Bloomberg reports………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

Thanks to the market’s surge over the past twelve months, many retail investors have begun to once again look at market gurus and their portfolios in order to find the next slate of outperforming stocks. While tracking 13-F filings from hedge funds (which reveal their positions) is one way an individual investor can tap into the ideas of investing gurus, an ETF approach that does the work for you is another way to go.
This technique has been successfully developed by the Global X Guru Index ETF which has not only crushed the market, but it has attracted a decent sized following as well. In fact, total AUM for the fund is approaching $600 million, while it has added over 28% in the past twelve months compared to a roughly 20% gain for the S&P 500 in the same time frame……………………………………….Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

Commodity market regulator Forward Markets Commission may relax the daily price limit for agricultural commodities on the futures platform. This will be in line with that of non-agricultural commodities such as bullion, metals and energy traded on the exchanges.
Currently, agricultural commodities have a maximum daily price limit of four per cent on both the upper and lower sides. In contrast, bullion and other non-agricultural commodities, the first price limit is six per cent. It gets extended subsequently by three per cent, with a cooling period of 15 minutes………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

South Korea’s equity exchange will start offering physical gold trades for the first time today, as the government seeks to curb as much as $3 billion of black-market transactions.
Korea Exchange Inc., which has offered bullion futures since 1999, aims to gradually replace illegal sales that total as much as 70 metric tons annually and deprive the state of an estimated $280 million in taxes. Customs officers intercepted 360 kilograms last year as the number of busts more than doubled from 2012………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

The US derivatives watchdog has warned market participants of potential legal charges as it escalates a probe into more than a million energy, metals, foreign exchange and other swap transactions.
Commodity Futures Trading Commission staff have sent “Wells notices” as they examine a broad category of transactions that includes “exchanges of futures for swaps,” or EFSs, three people familiar with the matter said………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

The recent sharp decline in the Chinese currency is threatening to exacerbate China’s trade tensions with the U.S. and raising concerns over a potential currency war in Asia. China’s central bank has intervened since late February to drive down the value of the yuan against the U.S. dollar by 2.8% so far in 2014, almost erasing all of its gains last year and ushering in a rare period of weakness for a currency which has steadily appreciated over the past decade.
The People’s Bank of China argues the depreciation is needed to drive out speculators who were betting the yuan would continue to rise, according to people with direct knowledge of the central bank’s thinking………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

Pro-independence lobby pounces on Beijing economist’s report in move to reopen arguments over workability of UK currency union. Key reasons put forward by the UK government for rejecting a currency union with an independent Scotland are unsubstantiated, an economist has claimed.
The chancellor, George Osborne, cited Treasury advice when he ruled out sharing the pound in the event of a yes vote in this year’s independence referendum. But Leslie Young, economics professor at the Cheung Kong Graduate School of Business in Beijing, said the arguments could not withstand scrutiny………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

Although markets for trading carbon emission credits to reduce greenhouse gas emissions have stalled around the world, carbon markets are still emerging at the regional and national level, providing valuable clues about what does and doesn’t work.
In a new report, Duke University’s Richard Newell, William Pizer and Daniel Raimi discuss the key lessons from a decade of experience with carbon markets. They also discuss what it might take for these markets to develop and possibly link together in the coming years and decades………………………………………..Full Article: Source

Posted on 24 March 2014 by VRS |  Email |Print

Japanese companies covered by the Tokyo emissions trading scheme are on track to overshoot their targets after cutting carbon dioxide emissions by more than a fifth since the scheme began, a government official said. The market was Asia’s first when it launched in July 2010, and requires close to 1400 small businesses and factories to reduce their carbon dioxide by 6 per cent to 8 per cent by 2014.
In the 2012 financial year they emitted 10.61 million tonnes, Yuko Nishida, an environment official of the Tokyo metropolitan government told Reuters, unchanged from the year before, but down more than 22 per cent from the base year period (2002 to 2007)………………………………………..Full Article: Source

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