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Commodities Briefing 08.May 2009

Posted on 08 May 2009 by VRS |  Email |Print

From Indiatimes.com: Commodities will be among the first markets to recover from the current economic crisis, according to a report by Boston-based financial research and consulting firm Celent.

The commodity market rally began in early 2002 and continued until mid-2008. Between 2005 and 2008, it saw accelerated growth due to rising demand from emerging economies, capital infusion from non-commercial players and financial investors, and phenomenal growth in trading on commodity exchanges, the report said…….Full Article: Source

Posted on 08 May 2009 by VRS |  Email |Print

From Hardassetsinvestor.com: Commodities - that is, certain commodities, such as crude oil, base metals and the softs - have awakened to turn upward. At the same time, interest in safe-haven gold has been eroding. The renewed interest in commodities has been reflected in the price trends of broad-based exchange-traded products (ETPs).

Among the half-dozen notes and funds with trading histories of at least 200 days, five have broken to the upside of their 50-day moving averages. None has yet risen above its 200-day mark, the threshold for heralding a primary bull market. The one exchange-traded note (ETN) now trading below its 50-day average is paradoxically the one closest to starting a bullish trend…….Full Article: Source

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From Gulfnews.com: The crisis in the global economy has inevitably exposed the weaknesses in traditional financial structures, and investors are increasingly drawn to trading on futures markets as a hedge against risk.

The allure of gold - particularly in the Middle East and the Indian sub-continent is well understood, and gold prices have consistently demonstrated the continued demand for it…….Full Article: Source

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From FT: Gold exchange traded funds, investment vehicles that make buying bullion easier, only started life in 2003 but their rapid rise in popularity means they have collectively become one of the most significant holders of gold.

Dubbed the “people’s central bank”, ETFs’ combined holdings stand at 1,654 tonnes, making these funds the world’s sixth largest gold holder…….Full Article (Registration Required) : Source

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From Guardian.co.uk: Oil and industrial metals rose on Thursday, swept along by a storming share price rally as signals on the state of the U.S. banking sector gave investors reasons to boost holdings of key raw materials.
Oil rose towards $58 a barrel, hitting a 2009 peak. Copper, used in power and construction, climbed to its highest since April 16, and has soared more than 50 percent this year…….Full Article: Source

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From Time: Eighteen months ago, when the world was awash in asset bubbles, there was perhaps no market more overheated than commodities. Prices of everything from iron ore to palm oil to corn reached dizzying heights.
Crude oil nearly quintupled in five years; rice tripled in only five months. World Bank President Robert Zoellick called rising food and oil prices a “man-made catastrophe” that had the potential to quickly erase years of progress in overcoming poverty…….Full Article: Source

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From FT: The sharp rise in commodity prices in recent weeks is spurring unnerved corporate consumers to hedge their exposure to raw materials and rebuild depleted inventories.

As commodities prices rose yesterday to their highest level in six months, traders said there were signs of widespread activity among consumers - from airlines hedging their exposure to rising oil prices and car manufactures buying cheap aluminium to food companies securing supplies…….Full Article (Registration Required) : Source

Posted on 08 May 2009 by VRS |  Email |Print

From FT: Commodities prices on Thursday hit their highest level in six months, with crude oil at one point surging above $58 a barrel and leading a broad rally as consumers and investors bet on a quicker-than-had-been-expected economic recovery.

“A sense that the worst has passed on the macroeconomic front has investors looking for green shoots – and finding some,” said Hussein Allidina, head of commodities research at Morgan Stanley in New York, citing better-than-expected data out of Asia last month…….Full Article (Registration Required) : Source

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From AP: Oil prices jumped to almost $58 a barrel Thursday, extending gains to near six-month highs on investor expectations that global economic growth may begin to rebound by the end of the year.

Some analysts, however, warned that the higher prices did not reflect market fundamentals but were the result of oil investors mimicking rising equity markets…….Full Article: Source

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From WSJ: Qatar’s Oil Minister said Thursday that Organization of Petroleum Exporting Countries will discuss at its next meeting how to deal with oil market speculators as prices edge towards $60 a barrel.

“Speculation will be discussed, we want to be sure that what we are now seeing with increased oil prices is due to increased demand not just speculation,” Abdullah bin Hamad Al Attiyah told Zawya Dow Jones by telephone…….Full Article: Source

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From FT: Total, the French oil company, on Wednesday said it had suffered a drop in its oil production as Opec’s cuts forced the company to curtail its output in countries such as Nigeria and Venezuela.

The French company’s total production of oil and gas dropped to 2.322m barrels a day in the first quarter this year, down 4.3 per cent from the previous year’s first quarter…….Full Article (Registration Required) : Source

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From Washingtontimes.com: Federal proposals to curb carbon emissions will cost American households an average of $1,600 a year, the chief budget analyst for Congress said Thursday.

Meanwhile, President Obama outlined a budget that would cull $26 billion in revenue by rolling back tax breaks for oil and natural gas producers. He also called for examining alternatives to dumping nuclear waste in the Yucca Mountains located in Senate Majority Leader Harry Reid’s home state of Nevada…….Full Article: Source

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From FT: Ten years ago on Wednesday the UK Treasury sent gold prices tumbling when it announced it would sell a chunk of its gold reserves.

In a matter of weeks prices plunged to a 22-year low of $250 a troy ounce and, over the course of that year, central banks from Australia and Switzerland to the Netherlands announced plans to sell a large slice of their bullion…….Full Article (Registration Required) : Source

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From Miningweekly.com: The global financial-crisis-battered platinum market would have been in worse shape at the end of last year had it not been for scrap, market analysis company GFMS reports.

GFMS CEO Paul Walker says that the massive scrapping of old jewellery “saved the sector from crashing completely”. Walker explains that, towards the end of 2008, there was a growing trend to convert old platinum jewellery into scrap to take advantage of a buoyant platinum price…….Full Article: Source

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From Mineweb.com: Vale said that while the demand for iron ore outside of China remains “extremely weak”, global nickel demand is showing “some limited signals of improvement.”

Vale estimates that 20% of global nickel capacity is now idle, and the company is curtailing its own nickel supply…….Full Article: Source

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From Guardian.co.uk: Sugar futures on Thursday closed at highs dating back nearly three years as investors bought amid broad-based gains in commodity markets, while arabica coffee futures closed weak after tapping a seven-month high.
“We’re seeing some follow-through buying in sugar as part of the general euphoria in stock and commodity markets,” said Pierre Sebag of consultancy Sugar K Ltd in London…….Full Article: Source

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From Livemint.com: The International Sugar Organization said yesterday the deficit will reach 7.8 million tonnes this year, the most in more than a decade and higher than a February forecast of 4.3 million tonnes.
India, the largest consumer, will boost imports 33% to 4 million tonnes (mt) in the year through September 2010 as consumers buy more soft drinks and processed foods, according to Kingsman SA, a sugar broker and researcher…….Full Article: Source

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From Bloomberg: Soybeans and sugar will outperform other agricultural commodities this year as supply constraints boost prices, Michael Coleman, managing director of Aisling Analytics Pte. Ltd. said.

Drought in Latin America and lower U.S. plantings will reduce soybean output and strong demand from the Chinese government is absorbing supply, said Coleman in an interview in Singapore today…….Full Article: Source

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From Gulf-times.com: Qatar, Saudi Arabia and Bahrain officials said yesterday that they see no need to change their more than two-decade-old fixed-exchange rates to the US dollar.

“We are committed to the peg because it serves us well,” Saudi central bank Governor Mohamed al-Jasser said yesterday at an Islamic Financial Services Board conference held in Singapore. The dollar still remains the “dominant” global currency, he said…….Full Article: Source

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From WSJ: Singapore is ready to intervene in the currency market to brake the local dollar’s rise, a person familiar with the situation said Thursday, while the central bank reaffirmed there is no change in its policy for the currency.

The Monetary Authority of Singapore will buy the U.S. dollar “if it falls below S$1.4700, around S$1.4690,” the person said. He said 1.47 Singapore dollars to the U.S. dollar roughly equates with the strong end of the undisclosed trade-weighted band that the MAS uses to guide the Singapore currency…….Full Article: Source

Posted on 08 May 2009 by VRS |  Email |Print

From Nasdaq.com: In recent weeks, we’ve been seeing some exchange traded funds (ETFs) start to pop above their 200-day moving averages. Eventually, we will be in a new bull market. What can you do to be ready for it?

There is no way to tell when the market will definitely turn around and re-enter bull territory, but there is no question that it will eventually…….Full Article: Source

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From Reuters: Exchange-traded funds backed by precious metals saw record inflows in the first quarter of 2009 as investors sought a haven from volatility in other markets.

ETFs back each security issued with physical stocks of a given commodity, creating a product they claim is free from counterparty risk…….Full Article: Source

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From Guardian.co.uk: IntercontinentalExchange will explore opportunities to expand clearing operations and derivative ventures, but has no plans to expand into other areas such as corn or metals trading, said chief executive Jeffrey Sprecher.
“The bigger opportunities for us are to find things like credit default swaps that are illiquid and opaque,” Sprecher told Reuters in an interview late Wednesday after the annual Sugar Club dinner in New York…….Full Article: Source

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From Business-standard.com: The government has reopened the case for convergence between the capital market and commodity futures regulator, a move that has attracted opposition from the Forward Markets Commission (FMC), which regulates the commodities futures business.

If the move, which has attracted controversy in the past, goes through, the Securities and Exchange Board of India (Sebi) will be designated the regulator for both capital markets and commodity futures. The regulation of spot trading in commodities falls under the purview of state governments…….Full Article: Source

Posted on 08 May 2009 by VRS |  Email |Print

AIG Financial Products Corp. (AIG-FP), an AIG company (AIG), reported today that it has completed the sale of its commodity index business to the Equities business of UBS Investment Bank, including AIG`s rights to the DJ-AIG Commodity Index.

The purchase price for the transaction is $15 million, payable upon closing, plus additional payments of up to $135 million over the following 18 months based on future earnings of the purchased business…….Full Press Release: Source

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