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Commodities Briefing - Archive | March, 2009

Look to reinvest in commodities “around Christmas”

Posted on 31 March 2009 by VRS  |  Email |Print

From Guardian: Commodities and oil will offer huge returns when global inflation takes off, fund of funds Caliburn Capital says, but it advised investors to avoid length in them this year while deflationary pressures dominate.

Caliburn Chief Investment Officer Chris Bouckley was pessimistic over the outlook for the world economy, seeing it contracting this year and not hitting bottom until mid-2010…..Full Article: Source

Outlook seen mixed for commodities in second qtr

Posted on 31 March 2009 by VRS  |  Email |Print

From Forbes: Oil, copper, corn and soybean prices should rise in the second quarter, recovering further from recession, but gold, natural gas, nickel and wheat may ease due to weaker supply/demand fundamentals.

Commodities as a whole fared better in the first three months of 2009 than the last two quarters of 2008, and analysts predicted continued price swings in coming months as the asset class responds to attempts to fix the global economy…..Full Article: Source

Funds seeking mining and gold investment

Posted on 31 March 2009 by VRS  |  Email |Print

From Sovereign wealth funds from the Middle East, and Japanese and Korean companies are seeking mining acquisitions and investments after asset values dropped, competing with Chinese companies, UBS said.

“This is the time to do that because asset values are low,” Paul Knight, managing director and joint global head of metals and mining with UBS, said today. “The Koreans are looking at acquisitions, and the Japanese to some extent.”….Full Article: Source

Commodity prices ‘set to soar’

Posted on 31 March 2009 by VRS  |  Email |Print

From Mining group Xstrata on Friday said cutbacks in mineral production in response to the global recession could come back to haunt buyers as prices rise significantly due to shortages once demand recovers in response to a raft of stimulus measures implemented to deal with the global recession.

Commodity prices have plummeted due to flat demand as major consuming countries grapple with the worst global recession in more than six decades…..Full Article: Source

OPEC head Angola eyes oil prices at $75 in 2009

Posted on 31 March 2009 by VRS  |  Email |Print

From Reuters: Oil prices could reach $75 per barrel in 2009 despite a the economic crisis, OPEC president Angola said on Monday, adding that compliance by the 12-member group with the agreed cuts remained at around 80 percent.

Jose Botelho de Vasconcelos, who is also Angolan oil minister, said he hoped the upcoming G20 meeting will help stimulate the world economy and contribute to growing demand for oil and higher oil prices…..Full Article: Source

Saudi non-oil exports fall 18 percent in January

Posted on 31 March 2009 by VRS  |  Email |Print

From Forbes: Saudi Arabia’s non-oil exports fell 18 percent in January compared to the same month a year ago, the kingdom’s economy and planning ministry said Monday.

The slump highlights the affect of the global economic downturn on the OPEC powerhouse, which has been trying to diversify its economy away from oil…..Full Article: Source

Oil falls below $49 on auto struggles

Posted on 31 March 2009 by VRS  |  Email |Print

From Oil fell below $49 a barrel on Monday after the U.S. government rejected restructuring plans from embattled automakers GM and Chrysler.

The moves - including forcing GM CEO Rick Wagoner out - renewed fears of potential bankruptcies at the companies and prompted a stock selloff…..Full Article: Source

Low oil prices putting supply growth at risk

Posted on 31 March 2009 by VRS  |  Email |Print

From The collapse in oil prices could end up cutting the growth in future oil supply in half from what would have been anticipated during the high price period, according to a new study from Cambridge Energy Research Associates (CERA), an IHS

The Long Aftershock concludes that about 7.6 million barrels per day (mbd) out of total potential future net growth of 14.5 mbd from 2009 to 2014 are “at risk.”….Full Article: Source

Oil price reasonable given world economy: Qatar

Posted on 31 March 2009 by VRS  |  Email |Print

From AFP: Qatar’s Energy Minister Abdullah al-Attiya said on Monday that the latest price of oil is “reasonable” given the ongoing global economic downturn.

“Fifty (dollars a barrel) is a reasonable price for 2009, considering the global economic crisis,” Attiya told reporters on the sidelines of a two-day energy forum in Kuwait City…..Full Article: Source

OPEC seaborne exports continue to fall, analyst says

Posted on 31 March 2009 by VRS  |  Email |Print

From Seaborne oil exports from the Organization of Petroleum Exporting Countries, except Angola and Ecuador, will decline by 770,000 b/d in the 4 weeks to Apr. 11, according to shipping analyst Oil Movements (OM).

Exports will average 22.23 million b/d, down from 23.00 million b/d in the 4 weeks to Mar. 14, OM said in an estimate that is lower than last week’s, which itself represented a 5 1/2-year low of 22.41 million b/d…..Full Article: Source

Government to sell nuclear assets

Posted on 31 March 2009 by VRS  |  Email |Print

From BBC: The government has announced that it is putting the commercial arm of the UK’s Atomic Energy Agency, UKAEA Limited, up for sale.

UKAEA Ltd provides services such as waste management and decommissioning of old nuclear power plants, as well as supporting the building of new plants…..Full Article: Source

Credit Suisse boosts energy team with Merrill Lynch hire

Posted on 31 March 2009 by VRS  |  Email |Print

From WSJ: Credit Suisse (CS) has hired Jonathan Grundy from Merrill Lynch to head up its EMEA Energy business, according to an internal memo seen Monday by Dow Jones Newswires.

Grundy, who starts at Credit Suisse’s London office in July, was most recently Global Head of Energy & Power Investment Banking at Merrill Lynch as well as serving on the bank’s global investment banking executive committee…..Full Article: Source

Jolting the energy sector

Posted on 31 March 2009 by VRS  |  Email |Print

From It had been termed the Brave New World — the one where electricity restructuring would revolutionize business models, technology development and consumer behaviors. But it has yet to happen. With the newfound emphasis on climate change, however, the energy sector may be jolted in ways that advocates of deregulation had only dreamed.

It centers on controlling energy use, which in turn limits emissions, helps preserve the environment and increases grid reliability. It will take an holistic approach…..Full Article: Source

New day dawns for U.S. Global Warming Policy

Posted on 31 March 2009 by VRS  |  Email |Print

From President Barack Obama has reversed the U.S. position on global climate change negotiations from the skepticism, delays and obstructive strategies of the previous administration to a new cooperative policy based on both science and practicality.

“My team and I came here determined to make up for lost time. America is now once again strongly committed to developing a global response to climate change,” the President’s Special Envoy for Climate Change Todd Stern told journalists at the opening of the UN-backed Bonn climate talks on Sunday…..Full Article: Source

China points emissions finger

Posted on 31 March 2009 by VRS  |  Email |Print

From China has played a major card in negotiations in the run-up to the global climate change summit in Copenhagen, which is still eight months away.

China has put its own spin on what a “cap and trade” system should address…..Full Article: Source

Humans causing climate change - fact or fiction?

Posted on 31 March 2009 by VRS  |  Email |Print

From Emissions trading schemes and carbon trading are putting a heavy burden on energy costs as governments try to force reductions in carbon emissions - but are they justified? There are doubters out there.

While it seems that the “politics” of climate change may be settled, there is still much scientific debate over whether climate change is in fact caused by human activities, with the weight of scientific evidence tending to “unfrock” the climate “alarmists”…..Full Article: Source

Gold remains resilient despite sell-off in commodities

Posted on 31 March 2009 by VRS  |  Email |Print

From Growing negative sentiment is causing investors to move out of commodity markets, which is also helping to drag down gold prices.

Gold prices are modestly weaker Monday afternoon, trading in the mid-$951 per ounce level. There was an increase in volatility early in the North American session. Prices dropped to session lows of $908.60 just ahead of the open…..Full Article: Source

RBC predicts ‘significant volatility’ in gold prices

Posted on 31 March 2009 by VRS  |  Email |Print

From RBC Capital Markets forecasts the gold price will continue to be volatile “offering an attractive buying opportunity for gold stocks on pullbacks into periods of weak demand in Q2/09 and early Q3/09.”

Meanwhile RBC is maintaining its average gold price forecasts of $850/oz for this year, $875/oz for 2010, and $900/oz long-term. Key catalysts for gold are expected to be seasonal demand trends; speculative and investment flows; emerging market flows and scrap gold sales; and U.S. dollar impact…..Full Article: Source

Is platinum an early sign of economic springtime?

Posted on 31 March 2009 by VRS  |  Email |Print

From While the global motor industry is still in disarray, platinum is looking pretty good. Having troughed in October at just more than $770 (R7 422 at the current exchange rate) an ounce, the metal hit a high of $1 153 on Friday - a recovery of nearly 50 percent - before retreating to $1 131.

According to Bloomberg, Deutsche Bank ascribed the improvement to “relatively robust” jewellery demand, while Reuters quoted Citigroup linking it to expectations that the US government would provide aid to its car makers. The metal is used in catalytic converters, which reduce pollution from cars…..Full Article: Source

Goldman Sachs lowers gold forecast to $930 an ounce

Posted on 31 March 2009 by VRS  |  Email |Print

From Goldman Sachs has cut its gold price forecast to US$930 an ounce in the next six months because of an expected reduction in buying by gold-backed exchange-traded funds.

In February, The US bank raised its gold price forecast to US$950 an ounce in the next 6 months…..Full Article: Source

Copper drops most in 6 weeks in N.Y. on renewed demand concern

Posted on 31 March 2009 by VRS  |  Email |Print

From Bloomberg: Copper prices fell by the most in almost six weeks after the government said U.S. banks and carmakers may need more taxpayer help, renewing concern that the global economic slump will slash demand for raw materials.

The Reuters/Jefferies CRB Index of 19 commodities slid to the lowest in more than a week after the government ousted General Motors Corp. Chief Executive Officer Rick Wagoner…..Full Article: Source

SBI Mutual launches Gold ETF

Posted on 31 March 2009 by VRS  |  Email |Print

From WSJ: SBI Mutual Fund launched Monday a gold exchange-traded fund - India’s sixth - and said it expects the plan to collect 1.5 billion rupees ($29.7 million) to 2.0 billion rupees of investments initially.

The SBI Gold Exchange Traded Scheme will be open for subscription until April 28. It will then be traded on the National Stock Exchange…..Full Article: Source

New fund launches to be greatly reduced

Posted on 31 March 2009 by VRS  |  Email |Print

From The number of new managed funds launched over the next few years will be “greatly reduced”, as will their targeted “raise sizes”, according to Craig Northey, head of sales and relationship management at researcher Aegis.

“Between 2007-08 and 2008-09 we researched around 60 new funds each year, which is a lot, but we expect that number to fall away over the next two to three years,” he said…..Full Article: Source

Norway crown slumps, Gjedrem shuns safe haven tag

Posted on 31 March 2009 by VRS  |  Email |Print

From Forbes: The Norwegian crown weakened by 3 percent against the euro and dollar on Monday, hit by a drop in equity and oil prices and remarks from the central bank chief who said the currency is no safe haven, analysts said.

They said it also weakened on momentum from last week and slightly softer-than-forecast retail sales data for February…..Full Article: Source

Singapore may devalue currency in April

Posted on 31 March 2009 by VRS  |  Email |Print

From Bloomberg: The Monetary Authority of Singapore may devalue the city’s currency and allow it to drop 4 percent against the U.S. dollar by June 30 to aid exporters and lift the economy out of the worst recession since independence in 1965.

The central bank will shift the mid-point of the Singapore dollar trading band at a twice-yearly review in April, according to 15 of 17 economists surveyed by Bloomberg News…..Full Article: Source

MCX to set up commodity clearing arm

Posted on 31 March 2009 by VRS  |  Email |Print

From India’s largest commodity trading platform, the Multi-Commodity Exchange (MCX), is setting up a clearing corporation, a 100 per cent subsidiary, to look after the clearing of trading orders floated by members and clients.

The corporation, christened MCX Clearing Corporation, is likely to start functioning next month…..Full Article: Source

LSE in talks to buy India exchange stake

Posted on 31 March 2009 by VRS  |  Email |Print

From Reuters: The London Stock Exchange is in talks to buy a stake in new Indian stock exchange MCX-SX, the Business Standard reported on Monday.

The newspaper said a spokesman for the LSE would not comment on the discussions, but told the paper: “We have a strong commitment to the Indian market and feel certain that the country will continue to be at the centre of our international business.”….Full Article: Source

Ethiopian commodity exchange opens more warehouses

Posted on 31 March 2009 by VRS  |  Email |Print

From The Ethiopian commodity exchange (ECX) is devising a proposal for agriculture training centres to disseminate trading and exchange programs to coffee and green crop farmers.

Eleni Zaud Gebre Medhin (PHD) told Capital the institutions have already promised to include details of ECX’s program and how it is working in their curriculum for the diploma program…..Full Article: Source

RIP: Regional commodity exchanges

Posted on 31 March 2009 by VRS  |  Email |Print

From As I went inside the chamber of Mr. Kailash Chandra Shahra, the chief of Ruchi Soya Industries Limited, he asked me what business I was in. I said I am into the business of writing. He immediately lifted his face, with wrinkles visibly shaking and said, “I do not interact with journalists anymore.”

I happened to arrive early in Indore by an ATR operated by Jet Airways and just minutes before I took off from Ahmedabad, another ATR zoomed past us for the same destination – operated by King Fisher Airlines…..Full Article: Source

Nikkei & Tokyo Commodity Exchange to jointly manage the new “Nikkei-TOCOM Commodity Index”

Posted on 31 March 2009 by VRS  |  Email |Print

From Tokyo Commodity Exchange, Inc, Japan’s largest and Asia’s prominent commodity exchange, and Nikkei Inc. (Nikkei), Japan’s most influential economic daily newspaper, announced today that they have agreed to jointly manage the new “Nikkei-TOCOM Commodity Index”.

As a result of this agreement, the TOCOM Index which has been publicized by TOCOM since July 2006 will change its name to the “Nikkei-TOCOM Commodity Index” as of the April 1, 2009 calculation…..Full Article: Source

Dubai Tea Trading Centre launches new facility for global tea industry

Posted on 31 March 2009 by VRS  |  Email |Print

From The Dubai Tea Trading Centre (DTTC), a division of the Dubai Multi Commodities Centre (DMCC), unveiled today its new centralised tea storage, blending and value addition services as part of its expansion plans to accommodate the growing activities of the centre.

The new facility was inaugurated by Jamal Majid Bin Thaniah; Executive Vice Chairman, DP World and Group CEO, Ports Customs World; and Salma Ali Saif Bin Hareb Chief Executive Officer - Economic Zones World. The 23,731 square metre facility in Jebel Ali Free Zone also includes office space for regional and international tea companies…..Full Article: Source

Wheat rebounds from 4-week low on U.S. Northern Plains flooding

Posted on 31 March 2009 by VRS  |  Email |Print

From Bloomberg: Wheat rebounded from the lowest price in almost four weeks on speculation that the amount of spring wheat planted in the U.S. northern Great Plains will drop as excessive snow and rain flooded fields.

As much as six times normal precipitation has fallen in parts of North Dakota and Minnesota, the largest U.S. spring- wheat producers, in the past week, National Weather Service data show…..Full Article: Source

Gaming grains

Posted on 31 March 2009 by VRS  |  Email |Print

From There are two separate crops of wheat in the news right now. There is the winter wheat that was sown last fall and is beginning to sprout and grow.

The areas where this wheat is growing (primarily in the U.S. southern plains) have actually welcomed the rain - given the stage of the growth cycle, the rain that part of the country has experienced is helpful to the crop…..Full Article: Source

You have no choice but to be long commodities

Posted on 31 March 2009 by VRS  |  Email |Print

From Commodities are direct beneficiaries of inflation. Two weeks ago, Bernanke announced a plan to inflate the U.S. money supply by over a trillion dollars. Commodities celebrated. Oil and copper both broke out to new four-month highs.

The Swiss, British, and Japanese governments are also pursuing inflationary policies. As the world’s most important money issuers destroy their currencies, commodities could explode…..Full Article: Source

CFTC aims at speculators

Posted on 30 March 2009 by VRS  |  Email |Print

From WSJ: A proposal by U.S. commodity-market regulators to toughen oversight could change how some of the biggest traders operate. The Commodity Futures Trading Commission this past week published a so-called concept release, usually an early step toward a new regulation, that raises the possibility of capping the positions that certain financial traders can take.

The release comes after months of criticism leveled against the agency by lawmakers, who said the CFTC’s lack of action to rein in excessive speculation last summer propelled prices on energy and agricultural commodities to record highs…..Full Article: Source

Is this the return of the commodities bull?

Posted on 30 March 2009 by VRS  |  Email |Print

From “A wave of bullish sentiment” has swept the raw-materials markets, says Barclays Capital. The benchmark CRB index jumped by more than 7% last week and has hit a two-month high. Oil and copper have led the advance, reaching four-month highs above $50 a barrel and $4,135 a tonne respectively.

The red metal has gained more than 30% this year. Softs have risen too, with corn and soybeans at five-week highs…..Full Article: Source

Commodities revives confidence as bourse climbs

Posted on 30 March 2009 by VRS  |  Email |Print

From The Australian: The Australian share market closed higher yesterday as the big miners drove the bourse into positive territory. The benchmark S&P/ASX200 index rose 25.7 points or 0.7 per cent to 3672.3, while the broader All Ordinaries gained 29.3 points or 0.82 per cent to 3615.6.

At the close of day trading on the Sydney Futures Exchange the June share price index contract was 12 points higher at 3677, on a volume of 21,076 contracts…..Full Article: Source

Peter Schiff: Outlook for currencies, commodities & gold

Posted on 30 March 2009 by VRS  |  Email |Print

From I like the Asian currencies, the Japanese yen and the Singapore dollar. In Europe I like the Norwegian kroner and the Swiss franc. I also like the New Zealand dollar and the Australian dollar. I also favor any currency that’s pegged to the dollar, as long as it unpegs.

We believe the U.S. dollar is in a major long-term bear market, and as such, recommend keeping exposure to the dollar at an absolute minimum…..Full Article: Source

Hope for commodities as milk production falls

Posted on 30 March 2009 by VRS  |  Email |Print

From World prices for dairy commodities could stabilise – or potentially increase – in the wake of falling production. While acknowledging the possibility markets could come back into better balance, DairyCo however, points out significant stocks of recently accumulated product, would still need to be cleared before prices could increase significantly.

As already reported, UK production is looking like being 12 per cent (12,750 million litres) below quota…..Full Article: Source

How to buy the right commodities and currencies for your IRA

Posted on 30 March 2009 by VRS  |  Email |Print

From Any type of inflationary cycle is bad news for the buck, and all the other dollar-based investments in your retirement plan. But there’s another foreign currency you can use to minimize your exposure to the buck.

Remember, the best “anti-dollar” out there is the euro. Since the U.S. Fed is bent on printing money, and there’s nothing that you or I can do to stop it, we might as well benefit from the outcome by essentially selling dollars and buying euros…..Full Article: Source

How to buy gold

Posted on 30 March 2009 by VRS  |  Email |Print

From The current turmoil in the world’s stockmarkets has prompted a rush for safe havens where investors can shelter from the financial storms.

One of the favoured safe havens is gold, which has been much in demand in recent times. The bullion price has been pushed close to $1,000 a troy ounce in the past six months as investors have switched their money out of shares…..Full Article: Source

Gold still Golden for Option Sellers

Posted on 30 March 2009 by VRS  |  Email |Print

From While not the safe haven it used to be for traditional investors, the gold market is a good place for Option Writers to collect high percentage premium in early 09.

For the traders among us who want to write puts but are not totally convinced that commodities have made a low, the Gold market may be your salvation…..Full Article: Source

Silver: Gold’s poodle?

Posted on 30 March 2009 by VRS  |  Email |Print

From Gold gets most of the press and silver always seems to be in second place, and it will probably stay that way until we get to the blow-off phase of this precious metals bull market. During the panic buying phase or mania that accompany the blow-off phase, gold will be outside the price range of many people.

Anyone seeking any protection from the destruction of the U.S. dollar will buy whatever they can, and that is silver…..Full Article: Source

Platinum rises to a 6-month high

Posted on 30 March 2009 by VRS  |  Email |Print

From Platinum rose to a six-month high in London on speculation that demand for the metal used in autocatalysts will strengthen. Gold was little changed.

Aquarius Platinum Ltd, the fourth-biggest platinum producer in the world last year, rose the most in four months in London trading on plans to raise as much as $249 million (Dh914 million) from bond and share sales to buy Ridge Mining Plc…..Full Article: Source

Is platinum ready to rock?

Posted on 30 March 2009 by VRS  |  Email |Print

From Few metals - or commodities - have bounced by 50% or more from trough prices, typically seen around October 2008; among them may be counted platinum, silver, lead (a small base metal) and cocoa.

For platinum miners, the return to some respectability of key platinum group metal (PGM) prices may have averted a general and painful disaster within the specialised global subsector…..Full Article: Source

Copper slips from near 5-month high

Posted on 30 March 2009 by VRS  |  Email |Print

From Copper ended down Friday, backing away from a near five-month peak, as a general commodity downturn and uncertainties about the strength of real demand from manufacturers, particularly in China, weighed on values.

“We seem to have a little commodity malaise that’s everywhere today, from gold to cocoa,” said Sterling Smith, vice-president with FuturesOne in Chicago. “They all had little bumps lower, which I think was just some money coming off the table.”….Full Article: Source

Copper is king, for now

Posted on 30 March 2009 by VRS  |  Email |Print

From There’s no question that over the past month, listed copper stocks have attracted the strongest positive investor portfolio flows in the mining space of global equity markets, with leading lights including the likes of Yunnan Copper, Jiangxi Copper, and copper-gold names First Quantum and Pan Australian.

The MSCI Barra Dollar Index for all global equities has risen by a stiff 23% from multi-year lows seen earlier this month; listed copper stocks, by contrast, have bounced by an impressive 143% over a slightly longer period…..Full Article: Source

Deutsche Bank raises 2009 forecasts for Copper, Lead

Posted on 30 March 2009 by VRS  |  Email |Print

From Bloomberg: Deutsche Bank AG raised 2009 price targets for most base metals including copper on expectations the global economy will stabilize, while cutting calls for next year and 2011 on “a slower than previously expected recovery”.

Copper may average $3,288 a metric ton this year, 17 percent higher than an earlier forecast, the bank’s analysts led by Michael Lewis wrote today in a quarterly report…..Full Article: Source

Opec opts for moderate prices for now

Posted on 30 March 2009 by VRS  |  Email |Print

From Opec ruled out a fourth output cut at its meeting early this month because it does not want to trigger a sharp rise in prices that would further damage global oil demand, a key energy research centre said yesterday.

Instead, the world’s oil superpower Saudi Arabia and other key members of the 12-nation Organisation of Petroleum Exporting Countries stressed the need for compliance with recent decisions on output reduction to prevent a further slide crude prices, the London-based Centre for Global Energy Studies (CGES) said in its monthly market report…..Full Article: Source

Renewable energy heads slam government inaction

Posted on 30 March 2009 by VRS  |  Email |Print

From Renewable energy heads were dismayed by a speech given by UK energy minister, Mike O’Brien, yesterday and accused him of leaving the future of renewables firms hanging in the balance.

Instead, the minster asked industry to trust that government was listening to their concerns and would make an announcement shortly…..Full Article: Source

March 2009
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