Opalesque Commodities Briefing

The Year the World Felt the Might of China�s Commodity Traders

Wed, 30 Nov 2016 02:03:38 +0000

The Chinese speculators shaking up global commodity markets are switched-on, flush with cash and probably not getting enough sleep. For the second time this year, trading has exploded on the nation�s exchanges, pushing prices of everything from zinc to coal to multi-year highs and sending authorities scrambling to deflate the bubble before it bursts. Metals brokers described panic earlier this m...
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Rabobank Report Projects Better Commodity Prices Ahead?

Wed, 30 Nov 2016 02:03:22 +0000

A recent Rabobank report projects a rise in global demand should bring a three-year decline in commodity prices to an end. Nebraska Farm Bureau Senior Economist Jay Rempe says that outlook should give hope to farmers and ranchers who have been struggling through the downturn in the farm economy. He agrees with Rabobank officials that global demand for U.S. commodities is improving, especially for...
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Hedge funds favour grains to soft commodities - but will it last?

Wed, 30 Nov 2016 02:03:08 +0000

Hedge funds, despite lifting bullish bets on cotton to a three-year, favoured grains to soft commodities � so much so that many investors saw scope for fresh selling in the likes of corn. Managed money, a proxy for speculators, lifted its net long position in futures and options in the top 13 US-traded agricultural commodities, from corn to sugar, by 55,896 contracts in the week to last Tuesday,...
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Can OPEC still swing global oil prices? We�re about to find out

Wed, 30 Nov 2016 02:02:48 +0000

Two years ago, global oil prices crashed after the world started pumping out far more crude than anyone needed. That plunge, from $100 per barrel down to $45 per barrel, completely upended the global economy � and cost oil producers like Saudi Arabia billions of dollars in lost revenue. Now those oil producers have had enough. This Wednesday in Vienna, the Organization of the Petroleum Exporting...
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Here's Why the Drop in Oil Prices Isn't Over

Wed, 30 Nov 2016 02:02:33 +0000

Saudi Arabia, Iran, and Iraq can�t agree how to end a fight for market share. Here we go again. Like a year ago, crude oil futures are tumbling again Tuesday as hopes for a cut in output from the Organization of Petroleum Exporting Countries (OPEC) fade due to entrenched differences between its most important members. The benchmark contract for U.S. crude was down 3.9% at $45.27 a barrel, after R...
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Saudi Arabia's oil problems run far deeper than OPEC

Wed, 30 Nov 2016 02:02:19 +0000

Saudi Arabia's problems run far deeper than trying to cobble together a deal with fellow OPEC members to curb crude oil output in order to bolster prices. About two-thirds of Saudi Arabia's oil exports head to Asia, and the kingdom's struggles in the region's two biggest importers, China and India, are symptoms of its wider issues in crude markets. While Saudi Arabia has been increasing the total...
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Goldman Sees OPEC Meeting Down to the Wire With 30% Odds of Deal

Wed, 30 Nov 2016 02:02:04 +0000

The oil market is pricing in a 30 percent chance of producers reaching a deal to cut output at OPEC�s meeting in Vienna, according to Goldman Sachs Group Inc. Global benchmark Brent crude may swing $6 a barrel on Wednesday, based on implied volatility for options contracts, analysts including Damien Courvalin and Jeff Currie said in a report Monday. Futures would rally into the low $50s a barrel...
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Deal Or No Deal, OPEC Can't Win In Fight Against American Frackers

Wed, 30 Nov 2016 02:01:48 +0000

Like celebrating Thanksgiving with a houseful of in-laws, OPEC�s autumn meeting in Vienna brings a combination of joy and dread. Something unexpected usually crops up, but the headlines out of both meetings are about the same year after year: Iran Argues With Saudis. Grandpa Loses Dentures. Venezuela Pleads For Production Cuts. Three Year Old Has A Meltdown. Bomb Blasts Nigeria Pipeline. Sisters...
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Why Gold's Lost Sheen Should Be Temporary

Wed, 30 Nov 2016 02:01:30 +0000

Conventional wisdom suggests that a Federal Reserve rate hike next month is bearish for precious metals, particularly gold. This is because gold investors aren't rewarded with the interest coupon payments as Treasury holders are. Thus, the opportunity cost of owning gold is the potential cash flow of interest payments, or dividends if comparing it to equities. Accordingly, if bond and note yield...
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Here�s Why Gold Could Fall All The Way To $700

Wed, 30 Nov 2016 02:01:18 +0000

Even though the markets haven�t behaved logically of late, it would have seemed a slam dunk for gold to rise if Donald Trump won. After all, we faced uncertainty around his policies, rising inflation from infrastructure spending, and higher expected growth rates. But instead, gold has headed back down more sharply. It had its initial rise in the futures market when Trump looked like he was going ...
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Gold�s Recovery Falters as Fund Investors Keep Selling Assets

Wed, 30 Nov 2016 02:01:02 +0000

Gold halted its biggest gain in almost a month as investors extended the longest run of sales from bullion-backed funds in a year. Palladium climbed to the highest in almost 18 months. Holdings in exchange-traded funds backed by gold have fallen for the past 12 days and are heading for the biggest monthly drop in three years. Bullion prices are near a nine-month low as traders are certain that t...
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Zinc rises to highest since 2007

Wed, 30 Nov 2016 02:00:42 +0000

The rally in metals is showing no signs of slowing down. The Bloomberg Industrial Metals sub-index posted the biggest five-day gain since 2011, as zinc touched a nine-year high. Prices rallied after China�s top economic commission approved a $36 billion plan on new rail links around Beijing, boosting demand for industrial raw materials. Zinc for delivery in three months rose 2.9 percent to settle...
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Japan's need for aluminum premium futures is limited, says LME chief

Wed, 30 Nov 2016 02:00:25 +0000

Japan's need for aluminum premium futures is limited, London Metal Exchange CEO Garry Jones told the LME Tokyo Gala event Tuesday. LME launched four physically settled regional aluminum premium contracts, including Northeast Asia premium contracts for delivery to Japan and South Korea, in November 2015. "They were launched when the market was high. Premiums have since come down and there is ...
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Metals Pare Best Rally Since 2012 as China Curbs Speculation

Wed, 30 Nov 2016 02:00:04 +0000

Industrial metals slumped, paring the biggest monthly rally in four years, on signs that China is taking steps to cool a trading frenzy in commodities. The Shanghai Futures Exchange and Dalian Commodity Exchange have raised margins and fees to ease a trading frenzy that�s fueled aggressive price gains this month, and further measures are expected, according to Citigroup Inc. analysts. �Chinese in...
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China, More Than Trump, Fuels Commodity ETF Surge

Wed, 30 Nov 2016 01:59:48 +0000

It's no secret that base metals have done well in the month of November. Copper is up 20% month-to-date, its best monthly showing in a decade, according to Bloomberg. Everything from lead to zinc to nickel is up double-digit percentages also. The PowerShares DB Base Metals Fund (DBB)?which holds futures on copper, aluminum and zinc?now has a gain of more than 33% for the year. These monster moves...
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5 Agricultural ETFs Upgraded to Buys

Wed, 30 Nov 2016 01:59:36 +0000

So far, the year 2016 has been moderate for agricultural commodities with some specific grains like sugar, soybean and coffee seeing a spike in prices while most other still reeling under pressure as evident by the 1.5% year-to-date decline (as of November 25, 2016) in the broader soft commodity ETF PowerShares DB Agriculture ETF DBA. Even a subdued greenback could not turn the tide for all soft...
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China Tightens Controls on Overseas Use of Its Currency

Wed, 30 Nov 2016 01:59:25 +0000

As an exodus of money adds to the pressure on a slowing economy, regulators are trying to put the brakes on overseas use of China�s currency by increasing the scrutiny of certain overseas deals. The decision to restrict overseas use of the renminbi represents a setback in China�s long-term drive to turn the currency into a rival to the dollar and euro in the global marketplace. Beijing had pursue...
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Top Economists Around the World Assess India�s Currency Curbs

Wed, 30 Nov 2016 01:59:13 +0000

It has been more than three weeks since the government announced its decision to demonetise old Rs 500 and Rs 1,000 currency notes. There has been a wide-ranging debate on whether the government�s move will indeed succeed in curbing black money hoarding and tax evasion. Analysts have argued on the short-term and long-term impact of the move. Citizens have stood in queues for hours outside bank br...
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New platform cuts electricity bills for reduced carbon emission

Wed, 30 Nov 2016 01:59:02 +0000

Polluters who have reduced their carbon emissions can now apply for a reduction to their electricity bill, thanks to a new system rolled out by the carbon trade center in Beijing. Electric Carbon Contract, a cooperation project between Beijing Environment Exchange and GP Power Electricity Group, was launched on Tuesday in Beijing. The system links carbon trading with preferential electricity rate...
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EU cement giants get �5bn carbon market windfall

Wed, 30 Nov 2016 01:58:50 +0000

The EU carbon market is supposed to make polluters pay. But generous handouts to industries deemed at risk of losing business abroad are undermining the system, a watchdog has warned. Cement producers reaped a �5 billion windfall from the emissions trading system (ETS) between 2008 and 2015, their annual reports reveal. Companies like Lafarge, Heidelberg and Cemex profited from selling carbon all...
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