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Commodities Briefing 09.Feb 2011

Posted on 09 February 2011 by VRS |  Email |Print

Jeremy FriesenFrom Bloomberg: Commodities will beat stocks in China, Brazil and other emerging economies this year as inflationary pressure curbs equity gains, said Societe Generale.
Growth of raw-material consumption in emerging economies led by China will be sustained even as prices advance, said commodity analyst Jeremy Friesen, who was a strategist at Morgan Stanley in New York before joining the Paris-based bank……………………………………….Full Article: Source

Posted on 09 February 2011 by VRS |  Email |Print

From Economist.com: In 2007 and 2008, before the world was swept by financial panic, the biggest global economic threat appeared to be a sharp and sustained rise in commodity prices. Soaring oil costs rattled rich world consumers while a spike in food prices battered the world’s poor. Prices tumbled during the crisis but have crept up again in recovery. A new crisis may loom.
Overheating emerging markets are boosting global demand at a time when supply is tight. Extreme weather events have led to poor harvests around the world. Some credit rising prices with a wave of political unrest, which has itself placed upward pressure on commodities, especially oil……………………………………….Full Article: Source

Posted on 09 February 2011 by VRS |  Email |Print

From Dow Jones: Prices of commodities imported by France rose in January led by oil prices though the increase was lower than in December, the country’s statistics agency said Tuesday.
The price of Brent crude oil rose 5.1% in dollar terms in January to $96.4 a barrel, compared with a 7.6% increase in December. In euro terms, the price of crude oil rose 3.9% in January down from a 11% increase in December, Insee, as the agency is known, said……………………………………….Full Article: Source

Posted on 09 February 2011 by VRS |  Email |Print

From Investmentinternational.com: Investors should still consider exposure to commodities despite high prices and the recent slump in gold is likely to be temporary, according to experts.
The price of gold fell by nearly $100 at the start of 2011 causing some to speculate over its future and that of commodities in general. However, Nick Raynor, investment adviser at The Share Centre, believes that investors should still consider exposure to this sector……………………………………….Full Article: Source

Posted on 09 February 2011 by VRS |  Email |Print

From WSJ: China’s latest move to cool its economy also chilled commodities markets from copper to coffee. But a weaker dollar helped most commodities recover by the end of the day.
The People’s Bank of China said it will raise key interest rates by a quarter of a percentage point each, its third increase since October. While markets had expected such a move, the timing was surprising, coming on the last day of the Lunar New Year holiday……………………………………….Full Article: Source

Posted on 09 February 2011 by VRS |  Email |Print

From Resourceinvestor.com: Commodities are a very volatile asset class and unlike stocks, high prices will reduce demand while low prices will reduce production and supply. While buying breakouts and momentum in stocks often works well with the right risk controls, buying weakness rather than strength is more advisable in commodities.
The continuous commodity index (CCI) recently hit an all-time high and has continued to make new highs. The energy and agriculture sectors have been red-hot. Two things concern us in regards to the CCI. First, the market has had a single 8% pullback in the last eight months……………………………………….Full Article: Source

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From Reuters: The Group of 20 wealthy and emerging nations has more pressing matters to discuss than the issue of regulating commodity markets, Canadian Finance Minister Jim Flaherty said on Tuesday.
“We have more fundamental issues to address than perhaps some degree of speculation in markets. We have issues with respect to global imbalances, with respect to inflexibility, relatively speaking, of some Asian currencies including the Chinese currency,” he told reporters in Ottawa……………………………………….Full Article: Source

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From Arabnews.com: Saudi Arabia wields a significant leverage in future increases in oil production as it commands the largest spare capacity of around four million barrels per day, according to Global Investment House (Global).
“With the Saudi King indicating the range of $75-$80 as satisfactory, we believe Saudi Arabia might be prepared to boost its output if oil prices move towards the levels beyond $100 per barrel mark seen in 2008,” Global said in its Oil Market-2010 Review……………………………………….Full Article: Source

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From Guardian: US diplomat convinced by Saudi expert that reserves of world’s biggest oil exporter have been overstated by nearly 40%. The US fears that Saudi Arabia, the world’s largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.
The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%……………………………………….Full Article: Source

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From Matthey.com: The price of iridium, a pgm, could soar to new heights in 2011, according to a senior executive at Johnson Matthey. The general manager for market research Peter Duncan said as the economy recovers and industries find new uses for the metal, iridium could rise even higher than the record $865 (£537) per ounce it reached recently.
Part of the demand has been driven by increased production of sapphire crystals for LEDs in backlit televisions and mobile devices, Mr Duncan said, adding that this demand is “not speculative, there is real industrial buying driving it”……………………………………….Full Article: Source

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From Big4.com: The number of mega-deals in the metal sector, defined as deals with a disclosed value of at least $1 billion, increased dramatically with five deals in Q4 2010, bringing the 2010 total of mega-deals to 16, compared with only 6 mega-deals covering all of 2009. This represents a 167% increase.
According to the PwC US report, Forging ahead: Fourth-quarter 2010 global metals industry mergers and acquisitions analysis, deal volume in the global metals sector showed improvement in 2010, rising to 101 deals, up 7% from 2009……………………………………….Full Article: Source

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From Resourceinvestor.com: A serious lack of rare earth elements is endemically afflicting the world body politic. It has been brought on by a chronic combination of American short sightedness and Chinese need for self survival.
It is well known that rare earths, a group of 17 atomic elements, are essential for the survival of cutting edge industry in such diverse areas as nuclear launch missiles hybrid autos, wind turbines, solar devices, oncological applications, night-vision devices and petroleum production……………………………………….Full Article: Source

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From Bloomberg: Gold may get a boost as JPMorgan Chase & Co. joins the two biggest U.S. futures markets in allowing the metal to be used as collateral for trading, according to MF Global Holdings Ltd.
JPMorgan said yesterday it will accept bullion as more clients seek to use gold as an inflation hedge and to post as collateral. CME Group Inc. in October 2009 allowed bullion’s use as collateral, and Intercontinental Exchange Inc. followed last year……………………………………….Full Article: Source

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From Mineweb.co.za: Silver promises to become the next big buzzword among investors in 2011 and beyond, according to one of the investment industry’s most prescient and successful experts on precious metals.
Eric Sprott is the founder of the Toronto-based investment firm, Sprott Asset Management LP. His renowned hedge fund, Sprott Hedge Fund LP, is heavily weighted in precious metals and has generated an estimated 23% annualized return over the past decade. Other similarly oriented funds under his stewardship have also been stellar performers in recent years……………………………………….Full Article: Source

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From Thestreet.com: Commodities have been on the forefront of the minds of analysts, investors, and market commentators as they are bombarded daily with news of the rising price of resources. Copper has already fallen into focus at the start of this week as a combination of supply concerns and forecasts of rising demand pushed the red metal to a new record high.
Meanwhile, agriculture prices have been on a tear, leading the U.N.’s food price index to an historic peak, surpassing the staggering levels that touched off global unrest in 2008……………………………………….Full Article: Source

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From Etfdb.com: The introduction and rapid expansion of the ETF industry has no doubt been a very positive development for investors big and small. The low fees characteristic of the exchange-traded structure have allowed cost-conscious investors to minimize expenses without sacrificing returns, while the enhanced tax efficiency and intraday trading capabilities have contributed increased flexibility to the investing public.
As ETFs have gained traction with investors, the size of the product lineup has grown rapidly. What was relatively recently a few hundred funds offering exposure to “plain vanilla” stock and bond benchmarks has quickly grown to a stable of more than 1,100 exchange-traded products covering nearly every nook and cranny of the investable universe……………………………………….Full Article: Source

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From 234next.com: The Abuja Securities and Commodities Exchange (ASCE) is partnering with the CBN to embark on Warehouse Receipt Financing scheme for farmers.
The group head, management services of the Exchange, Zaheera Baba-Ari, disclosed the plan in an interview with the News Agency of Nigeria (NAN) in Abuja on Tuesday……………………………………….Full Article: Source

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From Banking-business-review.com: Tokyo Commodity Exchange (TOCOM) has received approval from the Minister of Economy, Trade and Industry to adopt an error trade policy, to be implemented from 1 March 2011.
As a matter of principle, TOCOM currently doesn’t allow cancellation of executed trades except in certain specific cases (e.g: the failure of a Member’s system) in order to maintain an orderly market……………………………………….Full Article: Source

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From Reuters: The London Stock Exchange is in advanced talks to take over Toronto Stock Exchange owner TMX Group in a deal that would create a mining-dominant exchange at a time of rising commodity prices.
Here are some facts about the two exchanges:………………………………………Full Article: Source

Posted on 09 February 2011 by VRS |  Email |Print

From Channelnewsasia.com: Trading volumes in derivatives, commodities and Over-The-Counter (OTC) clearing on the Singapore Exchange (SGX) increased in January from a year earlier. However, shares trading in the securities market saw a decline in trading volumes from a year earlier.
The total market turnover in the securities market saw a 16 per cent fall in volume to 38 billion shares valued at S$37.2 billion last month. That compares with a turnover of 45.2 billion shares worth S$38.2 billion traded in the same period last year……………………………………….Full Article: Source

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From Bloomberg: Asian currencies extended earlier gains after China raised interest rates for a third time since mid-October to contain inflation.
The currencies rose earlier as reports showed accelerating regional growth. Indonesia’s economy expanded at the fastest annual pace in six years last quarter, a report showed yesterday, while India’s statistics office predicted the economy will expand 8.6 percent in the 12 months through March, the most in three years……………………………………….Full Article: Source

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From Reuters: Call it what you like — war, tragedy or farce — but the disagreement over global currency exchange rates shows no sign of coming to a peaceful negotiated agreement.
Asked last week if loose Federal Reserve monetary policy was to blame for inflation in emerging markets, Ben Bernanke stoutly denied that it was anything to do with him, maintaining in central banker-speak that he’d been tucked up in bed at home at the time……………………………………….Full Article: Source

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From Reuters: Commodities risk at UBS, Switzerland’s biggest bank, rose for the second consecutive quarter after a series of declines, the bank said in its fourth quarter report released on Tuesday.
The bank’s average value at risk (VaR) rose to 4 million Swiss francs ($4.2 million) in the fourth quarter from 3 million in the July-September period and was also up year-on-year……………………………………….Full Article: Source

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From AFP: Anglo-Swiss mining group Xstrata on Tuesday reported a sevenfold increase in annual net profit in 2010 as it rode the forecast boom in commodities markets and prices.
Net profit reached 4.69 billion dollars (3.4 billion euros) last year after a drop in 2009, preliminary results showed……………………………………….Full Article: Source

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From Koreaherald.com: President Lee Myung-bak’s green growth initiative faces a setback as the government is poised to postpone introducing the carbon trading system amid tough opposition from businesses.
On Monday Lee said the government plans to implement the scheme in a flexible manner, considering “international trends and industrial competitiveness.”………………………………………Full Article: Source

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From Bloomberg: Thefts of European Union carbon allowances last month are hurting investor confidence and may limit spot trading for more than three months, the European Energy Exchange AG said.
Spot carbon trading stopped on the Leipzig, Germany-based EEX following the EU’s suspension of 30 national emission registries after a series of computer-hacking attacks left about 29 million euros ($40 million) worth of permits missing last month……………………………………….Full Article: Source

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From Reuters: Italy’s environment ministry said it had tracked the transfer of almost 270,000 stolen European Union carbon permits to Liechtenstein and Britain, worth about 39.4 million euros at today’s prices, in the latest development after the European Union’s spot carbon market.
The EU Commission froze spot carbon trade on Jan. 19 in its emissions trading scheme (ETS) after emissions permits were allegedly stolen from registry accounts……………………………………….Full Article: Source

Posted on 09 February 2011 by VRS |  Email |Print

From Commodityonline.com: I often get asked - how long does it take to learn how to trade commodities? That is a tough question to answer. The short answer is that a diligent person can learn the basics of trading commodities in a couple months. The long answer is that it can take a lifetime to master.
Since most people just want to make a consistent profit from trading commodities, we will concentrate on the timeframe for achieving that……………………………………….Full Article: Source

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