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Commodities Briefing 01.Nov 2010

Posted on 01 November 2010 by VRS |  Email |Print

From Hurriyetdailynews.com: China’s move to increase margin limits on agricultural futures including rubber and rice is aimed at curbing trading risks and containing inflation as prices surge, an analyst at Wanda Futures said.

“The moves were aimed at cracking down on speculation, basically their way of discouraging speculative money from flowing into the exchange-traded commodities,” Axl Wang, Beijing research manager, at Wanda said by phone. The Shanghai Futures Exchange on Friday increased the margin limits on natural rubber to 11 percent from 8 percent…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Telegraph: Apparently a sugar rush can cause twitchiness, spasms and hyper-excitability – before retreating to leave you feeling drained and lethargic. It’s a pretty accurate description of what’s been going on in the market for the sweetener over the past 12 months.
Sugar prices hit a 30-year high in February, whipping the market into a state of frenzy, before plunging by half on better-than-expected production figures. And this autumn there has been a second dash for the soft commodity – but will it be followed by another correction?……………………………………Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Wallstreetpit.com: As with anything in economic forecasting, what I am about to say is at best an educated guess. Given the present environment, where is the global economy likely to go? Any analysis like this has to contend with political factors that drive the major imbalances of the global economy.

China insists on keeping its currency cheap in order to promote employment at home. The US does not care about deficits or currency debasement, as it seeks Keynesian remedies to its economic crises. (Little realizing that they are making things worse…)……………………………………Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Csmonitor.com: While Krugman casts others as being “worst economist in the world”, he does his best to try to earn that title for himself. “Higher commodity prices will hurt the recovery only if they rise in real terms. And they’ll only rise in real terms if QE succeeds in increasing real demand. And this will happen only if, yes, QE2 is successful in helping economic recovery.

What this official is saying is a version of the classic freshman mistake: an increase in demand leads to higher prices, and higher prices make people buy less, so an increase in demand leads to lower sales. Amazing stuff, and further evidence of the Dark Age of economics now descending.”……………………………………Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Commodities-now.com: Investors have largely failed to recognize the changing face of emerging markets and the potential of fundamentally undervalued currencies, especially in Asian and African countries, a UBS fund manager told Reuters last week.

“Over the past five to 10 years emerging markets have reduced their credit risk, improved their debt dynamic and many have stabilized politically without the majority of investors realising it,” Uta Fehm said…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Bi-me.com: Oil prices rose Friday after the forecast for global oil demand for this year was raised and following the closure of a key pipeline carrying crude to the United States. New York’s main contract, light sweet crude for delivery in October jumped US$2.20 to US$76.45 a barrel.

Brent North Sea crude for October delivery climbed 69 cents to US$78.16 dollars…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From AFP: Kuwaiti Oil Minister Sheikh Ahmad Abdullah al-Sabah said on Sunday the price of oil is “very comfortable” despite crude having slid below 82 dollars a barrel.

Speaking to reporters on the sidelines of the second “Kuwait Financial Forum”, the minister said he expects no change in output quotas at the next meeting of the Organisation of Petroleum Exporting Countries (OPEC)…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Reuters: Qatar’s energy minister said on Monday it was difficult to predict what OPEC would decide on its oil output policy in 2011 because of the uncertainty surrounding the global economy.

“It is very difficult to predict what we should do next year (on output policy),” Abdullah al-Attiyah told Reuters in Singapore before attending an industry conference. “We have to watch the market very carefully.”……………………………………Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Gulfnews.com: For a very long time, no analyst has seen the oil market as stable as it was in October. Prices, though breaking the psychological barrier of $80 (Dh293.8) per barrel ($/b), moved in a narrow range such that the highest price for the Opec basket of crudes was $81.51/b on October 6 and the lowest was $78.54/b on October 22. Therefore the average for the month is just below $80/b. This is a significant improvement over the $74.63/b average for September.

Yet the market remains concerned about the economy and the Opec Conference on October 14 declared that “whilst economic recovery is underway, there is still considerable concern about the magnitude and pace of this recovery” and that “market fundamentals remain weak, refinery utilisation rates are low and product inventories have risen considerably.”……………………………………Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Bloomberg: Hedge funds raised bullish bets on oil to the highest level in more than six months as supplies of gasoline fell, French refinery strikes ended and plants in the U.S. and Europe returned to service.

The funds and other large speculators increased wagers on rising crude prices by 9.3 percent in the seven days ended Oct. 26, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report. It was the highest level since April 16…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From People.com.cn: China’s long-term coal demand will remain strong despite falling coal consumption in the second half, Ernst & Young said. “I am confident in the Chinese coal industry over the next five years, although the sector might slow down to some degree,” said Mike Elliott, a global mining and metals analyst with Ernst & Young, a global financial services organization.

China holds an estimated 114.5 billion tons of recoverable coal reserves, and fossil fuels make up around 70 percent of the nation’s total primary energy consumption…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Mineweb.co.za: The gold price managed its big upwards move in September despite signs that the IMF is managing to accelerate its gold sales programme - and the price has held up well in October in spite of the continuing IMF sales programme. According to a Reuters report the International Monetary Fund said that it had sold no less than 32.3 tonnes of gold in September under its announced sales programme to release 403.3 tonnes onto the market in an orderly manner.
India very much started the ball rolling with a purchase of 200 tonnes in late 2009 and a number of other Asian countries have also purchased much smaller amounts for their reserves. Almost a third of the latest sale was to yet another Asian country - this time Bangladesh - which bought 320,000 ounces (just under 10 tonnes)…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From AFP: Soaring prices are making Indians hesitant about buying gold as the Hindu festival of Diwali approaches, despite it being seen as an auspicious time to purchase the precious metal.

Firm international and local prices have made people delay or stagger buying, hoping that prices level off as the annual wedding season starts next month, analysts and consumers said…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Resourceinvestor.com: If you are at all attuned to the gold-stock sector, you’ve likely noticed a pickup in activity on the deal-making front this year. And indeed the gold miners are doing some moving and shaking. In fact, this industry is undergoing a consolidation unlike anything we’ve seen in this entire bull market. And for a variety of reasons, this may only be just the beginning.

Many investors have seen some of their own stocks directly affected by this consolidation, and it has been quite intriguing watching things unfold across the industry…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Resourceinvestor.com: Most investors have a deep-seated belief that bonds are a safe investment while gold is risky and volatile. If we explore this belief with an open mind, however, we will find that gold, not bonds, offers vastly superior wealth protection.

The 2008 financial crisis saw an unprecedented move out of equities and into bonds as investors looked for a safe haven, one that would protect their portfolios. Relatively few investors chose to move into gold…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Mineweb.com: Since we received reports from the CFTC that market players have made “repeated” and “fraudulent efforts to persuade and deviously control” silver prices, we have heard that HSBC Holdings Plc and JPMorgan Chase & Co. are facing an investor’s lawsuit of placing “spoof” trading orders to manipulate silver futures and options prices in violation of U.S. antitrust law.
The investor, Peter Laskaris, alleges that starting in March 2008, the banks colluded to suppress silver futures so that call options, or the right to buy, would decline, and put options for the right to sell would increase, according to the complaint filed late last week in federal court in Manhattan……………………………………Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Guardian: China’s near-monopoly on rare earth metals poses no threat to US security, a Pentagon report is likely to conclude. The year-long study, which will be published this week, may serve to allay concerns that China, which produces 97% of the world’s 17 rare earths vital to defence and technology industries, could re-impose a near-complete – and unannounced – export freeze that Beijing initiated in July.

Last week, the EU, World Trade Organisation and US trade bodies called for urgent co-operation on the issue, arguing that current trade agreements regarding raw materials are inadequate…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Businessspectator.com.au: BHP Billiton Ltd’s base metals division could triple its copper base as projects in the company’s Escondida copper mine drive growth over the next two to three years, according to Fairfax Media.

The forecast comes amid market views that the copper base is maturing and declining in grade. But UBS, after touring the site, said the market was ‘’seemingly underestimating the potential exploration upside of this tier 1 asset,” Fairfax reports…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Joongang Daily: As the prices of agricultural products and raw materials climb, the rate of return for overseas funds that invest in these fields is showing bullish growth. According to Zeroin, a fund ratings agency, and Hana Daetoo Securities yesterday, overseas funds that invested in agricultural commodities, such as corn and soybeans, and in raw materials, including gold and crude oil, are performing well.

Agri-funds, or funds that trade in agricultural futures, posted a monthly return of 5.02 percent between Sept. 20 and Oct. 20, recording the best return among 12 categories of foreign sector funds…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Dailymail.co.uk: The severity of the financial and banking crisis back in 2008 and 2009 compelled Ben Bernanke, the chairman of America’s Central Bank, to resort to extraordinary policy measures.

It can be argued that those measures saved America from tipping into a 1930’s-style depression. But it took zero interest rates together with Quantitative Easing and a substantial budget stimulus to do the trick…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From Bjreview.com.cn: Currently, most developed countries are still mired in economic slowdowns, while emerging economies have managed to secure heightened growth rates. Room for more aggressive fiscal stimulus in developed economies such as the United States, the EU and Japan is limited due to rising fiscal deficits and government debts.
And the sovereign debt crisis in the euro zone has certainly done nothing to alleviate the economic unease. Now, they are scheming to propel economic development through monetary policy adjustments, which involves depreciating their own currencies or forcing emerging economies to appreciate theirs…………………………………….Full Article: Source

Posted on 01 November 2010 by VRS |  Email |Print

From AFP: The head of the World Trade Organisation on Sunday expressed his concern over unilateral interventions on currency markets, amid tensions between China and the United States over a so-called currency war.

Asked about the dangers of such a currency war, Pascal Lamy told German weekly Welt am Sonntag: “I would not talk of a currency war, but of tensions or frictions. The uncoordinated interventions on currency markets worries me.”……………………………………Full Article: Source

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