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 less demand,” Jones said. Chicago Mercantile Exchange launched a cash-settled Japan premium contract, settled against S&P Global Platts CIF Japan spot premium assessment, in December 2015………………………………………..Full Article: Source

Iron ore futures in China rose for a third straight day, and at one point hit the highest level in almost three years, supported by firmer steel prices in the world’s top consumer. Both iron ore and steel came off the day’s peaks, but the recovery in futures from last week’s slide had lifted the price of spot iron ore by nearly 8 per cent in two days as physical buyers chased higher prices.
The most-traded January iron ore on the Dalian Commodity Exchange closed up 2.4 per cent at 622 yuan ($90) a tonne, after rising as much as 8.4 per cent to 658.50 yuan, its loftiest since February 2014………………………………….Full Article: Source

The rally in soybean futures continued, as funds pile into the oilseed, but what is fuelling this fund buying? One factor is that Chinese soy-complex and vegoil markets are once again in bull-mode, after the government stepped in to cool speculation last week.
Key to this buying is the weakness in the yuan, which on Monday reached eight-year-lows against the dollar, after a 12-day slide following the wake of the US election, an ironic result given president-elect Donald Trump’s frequent………………………………………Full Article: Source

Price fluctuations reveal that the mainland market is still too much of a speculative gamble for Hong Kong and overseas investors, analysts say. With the launch of the Shenzhen-Hong Kong Stock Connect approaching, some observers now expect the next step in Hong Kong’s financial links to the mainland could come through commodities trading.
Earlier this month, Charles Li Xiaojia, the chief executive of Hong Kong Exchanges and Clearing, said the bourse was likely to explore similar schemes for metals, bonds and initial share sales……………………………………Full Article: Source

A months-long rally in China’s commodity futures may be coming to an end after the country’s exchanges took steps to crack down on speculative trading. Futures for coal and iron ore that rallied sharply this year have gyrated this week following a dramatic rout on Friday evening after China’s three commodity exchanges increased margin requirements.
“It ran up too much and the increased margin requirements by the exchanges are starting to bite,” said a trader at one house that has taken big bets on commodities futures this year………………………………………..Full Article: Source

China’s futures brokers have been banned from providing margin financing, part of tighter measures aimed at cracking down speculation in the overheated financial market, according to a report in state-owned Shanghai Securities News.
The move by the China Securities Regulatory Commission comes amid other sweeping measures by the country’s major commodities exchanges this week, six months after the government stepped in to try to deflate a speculative bubble in the market…………………………………..Full Article: Source

Given the world’s ever-expanding inventories of wheat and corn, it seems hard to argue for higher prices for either one. Although the currently low wheat-to-corn price differential is particularly favorable for the use of feed wheat worldwide, support for Chicago wheat futures may lie within the fundamentals.
Since Aug. 31, December wheat futures have tacked on 6 percent and December corn is up about 13 percent. But should the wheat contract be the one with the bigger gains?…………………………………..Full Article: Source

Gold futures are now trading at almost $1,291 an ounce. And HSBC analyst James Steel says the price for the precious metal will rise through 207 no matter who ends up living in the White House.
But he says gold will rise higher if Republican presidential candidate Donald Trump beats Democrat Hillary Clinton. Steel argues that Trump’s policies are more “gold-bullish” than Clinton’s. But it’s, at best, a backhanded compliment……………………………………Full Article: Source

Gold futures on Tuesday snapped back from a tough October, sending prices to their highest finish in about a month, while the dollar dipped as uncertainty surrounding the outcome of the U.S. presidential election buoyed investment demand for the yellow metal.
Gold traders also awaited the U.S. Federal Reserve’s monetary policy announcement due Wednesday at the conclusion of the central bank’s two-day meeting. The meeting isn’t expected to produce an interest-rate hike, but could shed light on the chances for such a move by the end of the year, a potentially gold-negative development……………………………………Full Article: Source

In its continuing efforts to improve risk management at the exchanges’ end, market regulator Securities and Exchange Board of India (Sebi) is considering suspending trading in commodities or contracts that are illiquid. During its first year of regulating commodity derivatives after the merger of the Forward Markets Commission (FMC) with it, Sebi has focused on improving risk management of commodity exchanges with the powers it has.
And, wherever it has been possible and practical to do so, it has aligned them with the equity derivatives. In the second year, while focusing on introducing much-awaited new products and allowing new participants in the commodity derivatives, focus on strengthening risk management will continue……………………………………….Full Article: Source

Options traders are betting gold prices have more room to fall. Last week, as gold suffered its biggest weekly decline in three years, the cost of protecting against a decline in the shiny metal became more expensive than protecting against a rise, according to Macro Risk Advisors.
Bearish put options that protect against a 10% slump in the SPDR Gold Trust over a three-month period now cost slightly more than bullish call options protecting against a 10% rise over that time. A measure of the so-called skew, which essentially subtracts the cost of the call option from the cost of the put option, turned positive last week for the first time since the beginning of the year………………………………….Full Article: Source

Sebi’s move aims to enhance liquidity and broad base participation in the commodity market. Capital markets regulator Securities and Exchange Board of India (Sebi) on Wednesday allowed commodity derivative exchanges to launch options contracts for trading with the aim of increasing liquidity and attracting more investors to the commodities market.
Sebi said commodity options will facilitate hedging by market participants and help deepen the commodity derivatives market. The exchanges have been allowed to trade in options following a recommendation by the Commodity Derivatives Advisory Committee (CDAC), Sebi said in a circular……………………………………Full Article: Source

Before launching any futures contract, its specifications and launch calendar have to be notified well in advance to the market, Sebi said. The Securities and Exchange Board of India (Sebi) tightened on Tuesday the norms for derivatives traded on commodity bourses and said the terms of a futures contract cannot be changed without taking the regulator’s approval and informing market participants in advance.
Before launching any futures contract, its specifications and launch calendar have to be notified well in advance to the market, Sebi said………………………………………Full Article: Source

Eight times in the nine weeks leading up to August 15, 2016, hedge fund managers reduced their positions in agricultural futures, with cotton, wheat and corn particular sell-off targets.
For guidance, hedge funds may be looking to Managed Money, a benchmark for commodity speculators, which recently slashed its net long position in the “top 13 U.S.-traded agricultural commodities, from cotton to cattle, by 8,255 contracts in the week to last Tuesday,” according to Agrimoney.com, siting data from the Commodity Futures Trading Commission………………………………………..Full Article: Source

Agrimoney.com has reported that net long positions on key agricultural futures across the hedge fund industry have declined significantly in the past two to three months, down from roughly 600,000 contracts to 367,000 contracts in play.
Hedge funds across the country have repeatedly sold off stakes in corn, wheat, and cotton in particular during this time period. A number of factors may be contributing to this sudden shift in approach, including an important move from a leading commodity speculator, questions about the Federal Reserve’s possible interest rate change in the months to come, and environmental and seasonal factors in the agricultural industry that have affected supply and demand………………………………………..Full Article: Source

The Securities and Exchange Board of India (Sebi) announced a series of measures for strengthening and upgrading of risk management in commodity derivatives markets. Some new concepts were also introduced to deal with liquidity problems in stressed situations.
For instance, up to two days of risk coverage by initial margin, concentration margin, tools to regain matched book and ‘default waterfall’. An exchange’s accountability in a default has also been increased, to match those at equity exchanges. So far, exchanges were not a counter-party to trades but ensured and responsibilities were met out of margins………………………………………..Full Article: Source

Gold futures still have room to climb this year even as the Federal Reserve seesaws between a dovish and hawkish stance on monetary policy. Prices for the yellow metal may make “another try” at the $1,400-an-ounce level later this year, George Milling-Stanley, head of gold investment strategy at State Street Global Advisors, said.
He said he can’t guarantee a rate increase at all, with the Fed appearing to be “dovish one day and hawish another” day. He expects gold to see muted trading for the rest of the year but despite that, prices may still see another $50, $60 or $70 rise. Also on CNBC, Tom McClellan, editor of The McClellan Market Report, said next year and 2018 should be “hugely bullish” for gold……………………………………….Full Article: Source

Oil futures finished higher Wednesday, getting a lift from bigger-than-expected declines in U.S. supplies of crude and gasoline as well as a retreat in the dollar following minutes from the Federal Reserve’s July meeting.
Shortly before oil prices finished a choppy session on Nymex, minutes from the July Fed meeting showed officials at the central bank were split over whether an interest rate hike would be needed soon. That damped expectations for an interest rate hike before the end of the year, and put pressure on the dollar offering support for dollar-denominated commodities such as oil………………………………………..Full Article: Source

Palladium futures rallied Wednesday to settle at their highest level in more than a year, with strong vehicle sales in China implying strong demand for the metal used in car-making.
A weaker U.S. dollar provided support to the broad dollar-peg precious-metals complex. Gold and silver futures notched a second straight session of gains as some traders bet on a potential rise in Asian demand for the yellow metal………………………………………..Full Article: Source

Oil analysts from Citigroup Inc. to Bank of America Merrill Lynch are confident that the new bear market in crude will be short-lived. The options market increasingly agrees with them. Investors are paying the smallest premium in two months to protect against a drop in prices from now through the end of the year, even after oil entered a bear market.
The so-called put skew on December Brent and West Texas Intermediate options — the premium traders will pay for insurance that prices will fall rather than rise — has narrowed more than 30 percent since early July. The skew on second-month WTI contracts has fallen by almost half………………………………………..Full Article: Source

The Securities and Exchange Board of India (Sebi) is to finalise stricter regulations for warehouse service providers (WSPs) that are recognised by commodity exchanges (comexes), especially for storing goods meant for selling on the exchange platforms. This will be very significant for trading in agricultural commodities.
Sebi has asked its Commodity Derivatves Advisory Committee to give its views and a meeting this month will discuss the new regulations. Sebi will be assigning the responsibility of settlement of futures contracts to commodity derivatives exchanges………………………………………..Full Article: Source

Investors love having as many options as possible available to them to make a profit. Stock trading software and platforms are a dime a dozen, and option trading has become equally ubiquitous in the everyday investor’s world. However, commodities always seemed just out of reach for all but the wealthy or professional investor.
Futures exchanges carry commodities, which can be traded. Futures are typically used by companies to hedge their product against adverse price movements. For example, a gold mining company may use futures to lock in a specific price for the gold it mined………………………………………..Full Article: Source

Hopes have grown of reforms in the 13-year-old commodity futures market with Sebi likely to consider an advisory committee’s recommendation for new products and participants. Until now, trading of commodity futures has willy-nilly been the preserve of retail traders and a few corporates.
1. What can one hope to see? There may be introduction of options on gold, silver, possibly crude, refined soya oil and guar seed. Also, a few more new commodity futures contracts — tea, pig iron, brass, diamond, skimmed milk powder, egg, white butter — could be notified for trading on bourses like MCX, NCDEX and NMCE………………………………………..Full Article: Source

Copper retreated on concern that supply will keep outpacing demand as data showed rising output in China, the biggest producer and user of refined metal. A stronger dollar also hit commodities priced in the currency.
China’s production grew 7.6 percent in the first half, according to the National Bureau of Statistics Wednesday, as smelter margins improved. There will be a global surplus every year until 2020, Barclays Plc said in a July 19 note………………………………………..Full Article: Source

Chinese steel-related commodities futures dived on Monday, erasing last week’s rally as investors felt the previous gains outpaced physical demand for steel in China, the world’s top producer.
The October benchmark rebar contract on the Shanghai Futures Exchange and September iron ore contract on the Dalian Commodity Exchange deepened losses in the afternoon trading, hitting downside limit of 6 percent by close. Rebar was at a one-week low of 2,362 yuan ($352.61) a tonne and iron ore ended the day by 431 yuan a tonne………………………………………..Full Article: Source

Before money, people traded grain and precious metals directly with one another. Today, corn, wheat, gold and other commodities are traded through futures contracts that guarantee the purchase or sale of a given amount of the underlying commodity for a stated price on a set date.
The first futures contracts allowed farmers to lock in prices for their crops well before they were ready for market, taking the edge off the price plunge that could come with the harvest glut. These contracts could also assure that a user like a bread maker would have ready access to the commodity it would need in the off-season………………………………………..Full Article: Source

Leading bourse Bombay Stock Exchange (BSE) plans to launch commodity derivative segment which will allow trading in metals and has approached market regulator Sebi for approval. “BSE plans to set up a commodity derivative segment as soon as approvals are in place. It would consist of non-agricultural commodities like metal, oil and gas,” BSE Managing Director and CEO Ashishkumar Chauhan said.
Post the merger of the capital market regulator Sebi and commodity market watchdog Forward Market Commission (FMC), the exchange members need not create a separate subsidiary to start commodity trading………………………………………..Full Article: Source

The Shanghai Futures Exchange has vowed it won’t tolerate any abuse of trading rules after the unprecedented boom-bust episode earlier this year, adding that its products aren’t for mom and pop investors.
“Futures isn’t a mass market but a professional one,” the exchange said in comments to Bloomberg News. There’ll be “zero tolerance” of any activity that violates regulations, according to the statement, which said more than 900 cases of what it called abnormal activity were settled in the first five months………………………………………..Full Article: Source

Oil futures, like most risk assets, has been doing better in recent days as traders take heart from a late polls shift to Remain ahead of the EU referendum. Having fallen for six consecutive sessions from a 2016 high of $53 two weeks ago, international benchmark Brent crude returned to $50 earlier this week. It has been held back from further gains by supply concerns – so would a Remain victory send it soaring?
No, says investment bank BNP Paribas. It outlines a lose-lose scenario for oil: either a Leave vote sends the price spiralling lower in response to a demand-dampening surge for the dollar against the pound, or a Remain victory focuses attention back on supply and demand fundamentals that do not support higher prices………………………………………..Full Article: Source

The U.S. derivatives regulator is rethinking parts of its proposal to regulate automated trading and looking into whether the rule could affect too many people, it said on Thursday. The Commodity Futures Trading Commission, announcing it had reopened the public comment period on the rule through June 26, also said it is considering who should mitigate the risks of algorithmic trades and how the rule would apply when traders purchase their algorithms and systems.
It said it asked how to define “source code” and what software and hardware should be included within the term “Algorithmic Trading system.”……………………………………….Full Article: Source

Copper and gold face biggest monthly drop in six months as dollar strength takes toll in market pricing. China’s steel and iron ore futures are set for their worst monthly performance on record as a stronger US dollar weighed on commodities from copper to gold during May.
After a burst of speculative trading in the first four months of the year, China’s steel rebar contract has fallen 28 per cent this month, its worst performance since it started trading in 2009………………………………………..Full Article: Source

Euro, Japanese yen, United States dollar, and Australian dollar futures will be launched against the Chinese renminbi (CNH or offshore RMB) by Hong Kong Exchanges and Clearing (HKEX) which today announced that it received regulatory approval to offer the four new RMB currency futures set to go live on May 30th, 2016.
The cash-settled EUR/RMB, JPY/RMB and AUD/RMB will trade in renminbi, and the RMB/USD futures will be priced in US dollars, and all of them are aimed at appealing to hedgers and the risk-management needs of traders seeking exposure in China’s emerging currency as well as serving the capital efficiency of exchange-traded futures, as per the HKEX update………………………………………..Full Article: Source

New derivative products in the commodity markets are likely to be launched by the Securities and Exchange Board of India in the coming months. Three sub-working groups of the market regulator are looking at various issues relating to commodity derivatives – polling of prices, option limit and eligibility criteria for commodities to qualify for future trading. The groups are expected to submit their reports shortly.
“Once they submit their report, we will hold a meeting and look at possible options,” said NITI Aayog member Ramesh Chand, who also heads SEBI’s Commodity Market Advisory Committee and is currrently working on the issue………………………………………..Full Article: Source

The current slump in world commodity prices is forcing Africa to rethink its traditional dependence on raw material exports. This is why the time for African nations to lay the foundations for transitioning from extractive to learning economies is now.
The jolts are real. The International Monetary Fund has projected that the continent will grow by 3% in 2016. This is well below the 6% average growth over the past decade and the lowest rate in the past 15 years………………………………………..Full Article: Source

Chinese commodities dived on Monday, led by 6 percent falls in steel and iron ore futures, as deepening worries about China’s demand extended a fortnight of sharp drops and false rebounds in the country’s market for industrial metals.
Speculative funds rushed into China’s commodities futures last month, betting the country’s economy was bottoming. The buying frenzy alarmed domestic exchanges and regulators fearing a bubble could be forming as volumes and prices soared………………………………………..Full Article: Source

Chinese regulators appear to have successfully popped a mini-bubble for now in steel and other commodity futures, scaring off speculators who piled in last month to drive steep gains in the prices of raw materials from coal to cotton.
China has vowed that it won’t allow its commodity futures markets to become a “hot-bed” for speculators, fearing that price movements not based on fundamentals could skew investment decisions and hamper efforts to rein in overcapacity………………………………………..Full Article: Source

The Securities and Exchange Board of India (Sebi) is in talks with leading commodity exchanges about allowing options trading in select commodities. According to sources, the Multi Commodity Exchange might be allowed to introduce options in two metals, while the National Commodity & Derivatives Exchange (NCDEX) could be permitted options in two commodities from the oil complex.
“There is a vital need in the interest of the Indian economy to deepen the commodity derivatives market to attain the basis objectives of price discovery and provision of a platform for risk mitigation. The structural characteristics of options make them significantly attractive as a tool for price risk management.”……………………………………….Full Article: Source

The recent fevered commodities trading in China hasn’t been limited to iron ore. Investors have piled into futures for everything from wheat and cotton to eggs and asphalt. As with industrial metals, analysts reckon much of the interest is coming from speculative investors who have been turned off to China’s stock markets by tighter rules over trading.
“Chinese speculators didn’t want to buy into the equity market with all the curbs, so they jumped into the commodity markets and it seems they’ve done so in massive style,” said Michael Coleman, managing director at RCMA Asset Management Pte………………………………………..Full Article: Source

China’s securities regulator ordered the country’s major commodity futures exchanges this week to control speculative trading activity, sources told Reuters, after a surge in prices sparked fears of a boom-and-bust cycle.
In response, commodity futures exchanges in Dalian, Shanghai and Zhengzhou ordered major institutional investors that lack a commodities background to rein in their trading, three people with direct knowledge of the situation said. The sources didn’t define what was meant by a lack of background in commodities………………………………………..Full Article: Source

A surge of volatility in China’s once placid commodities futures markets has rattled industrial players who use them for hedging, with some taking losses or cutting exposure, driven out by a flood of speculative money from hedge funds and retail investors.
A herd of financial investors charged into commodities futures markets this year, throwing money into iron ore, rebar, cotton, and even egg futures, causing rapid spikes and leading many to warn of similarities with last year’s boom and bust in Chinese stocks………………………………………..Full Article: Source

China’s heavily traded iron ore and steel futures slid Tuesday after curbs aimed to cut speculation came into effect. The most active iron ore contract on the Dalian Commodity Exchange closed down 6 per cent at 450.5 yuan a tonne, while steel rebar futures dropped 3.8 per cent to close at 2,554 yuan a tonne.
A wave of money has entered China’s commodities markets this month, on improved demand in the steel industry and expectations that China’s government would boost property and infrastructure construction………………………………………..Full Article: Source

Exchanges hope to capture a larger share of derivatives trading, on demand from emerging markets. Trading in commodity and currency derivatives surged on the world’s exchanges last year as traders in emerging economies used futures to hedge themselves against rising market volatility.
Overall volumes for exchange-traded derivatives rose 12 per cent to 23.4bn contracts in 2015, the first increase in four years, according to annual data collated by the World Federation of Exchanges, a trade association for 200 market infrastructure operators………………………………………..Full Article: Source

Gold futures settled higher Thursday, scoring their best quarterly performance since 1986—a year when “Top Gun” was the most popular movie. Bullion has benefited as the Federal Reserve’s dovish stance on policy has softened the highflying U.S. dollar.
Prices for the most-active contracts saw a monthly gain of less than 0.1%—the smallest of the year, but gold jumped 16.4% in the first three months of 2016, its strongest quarterly showing since the third quarter of 1986, according to FactSet………………………………………..Full Article: Source

India’s markets regulator Sebi has allowed trading in commodity derivatives at stock exchanges operating in International Financial Services Centre (IFSC). The move comes after amendment was made under Securities Contracts Regulation Act to include commodity derivatives as securities.
The Securities and Exchange Board of India (Sebi) last year began regulating the commodity derivatives market as well. In a circular today, Sebi said “commodity derivatives shall be eligible as securities for trading and the stock exchanges operating in IFSC may permit dealing in commodity derivatives”. ……………………………………….Full Article: Source

While the FM did not specify products likely to be introduced, market participants expect the introduction of option contracts in commodity derivatives, similar to those available in equities. Finance minister Arun Jaitley on Monday indicated that the government plans to allow the launch of new commodity derivative products to help deepen the markets.
While the finance minister did not specify the products likely to be introduced, market participants expect the introduction of option contracts in the commodity derivatives market, similar to those available in the equities market. They also expect a wider range of indices to be introduced………………………………………..Full Article: Source

Lawmakers heaped criticism on an advisory committee report to the Commodity Futures Trading Commission recommending that the agency scrap its proposed rule on position limits in derivatives trading. The report and a dissenting opinion were presented at a meeting of the commission on Thursday.
The report, which was approved 8 to 1 by the Energy and Environmental Markets Advisory Committee, says that federally mandated position limits are not necessary and that the C.F.T.C. should not enact the rule it has been working on. It adds that if the agency goes ahead with the rule, it needs substantial changes………………………………………..Full Article: Source

At an event here, P K Bindish, chief general manger at the regulatory body, the Securities and Exchange Board of India (Sebi), said: “We want the commodity futures market to bring risk management at par with the equity market before allowing new instruments and a new set of participants for hedging on commexes.”
This implies Sebi might not allow instruments like options and indices to trade on a commodity exchange till these mitigation facilities are in place. While the commexes claim to already have a strong risk management system already in place, the recent suspension of castor seed futures by the National Commodity & Derivatives Exchange (NCDEX) has restirred the issue………………………………………..Full Article: Source

Euronext is launching sugar futures this autumn, before quotas are abolished in the European market, as the exchange continues to grow its commodity derivatives franchise. The pan-European exchange operator is launching sugar futures, subject to regulatory approvals, ahead of the European Union abolishing sugar production quotas on 30 September 2017.
The European Union is the third largest sugar producer and the second largest consumer in the world according to Euronext. Sugar futures can already be traded on rival exchange ICE, the former owner of Euronext………………………………………..Full Article: Source

After a stressful 2015, the coming year is likely to be one of turnaround for commodity exchanges, through introduction of new instruments and new classes of traders. The biggest event the comexes witnessed in 2015 was merger of its relatively less powerful regulator, the Forward Markets Commission, into the much stronger equity markets regulator, the Securities and Exchange Board of India (Sebi), effective September 28.
Right after, Sebi chairman U K Sinha said introduction of instruments like options and indices would be prioritised, to enhance depth in commodity derivatives market. Perhaps possible in the near future, he said………………………………………..Full Article: Source

Gold held near a three-month low on growing expectations that the Federal Reserve will increase interest rates in December. Odds that the central bank will raise rates next month have climbed to 66 percent, from 39 percent a month ago, according to Fed-fund futures data. A gauge of the dollar rose on Tuesday to the highest since at least 2005, curbing the appeal of bullion as an alternative asset.
Gold posted the biggest weekly drop in a year on Friday after a report showing U.S. payrolls surged in October, boosting the case for the Fed to raise rates. Chicago Fed President Charles Evans said on Tuesday he’d like the central bank to get back to a point where the federal funds rate is “trading comfortably at its neutral rate well above zero.”……………………………………….Full Article: Source