October 24th, 2011

Commodities surged, led by copper, nickel, lead and oil after a report showed manufacturing probably expanded in China, the world’s top metal consumer and the fastest-growing user of crude.

The Standard & Poor’s GSCI Index of 24 raw materials gained 2.4 percent as copper rose to the biggest two-day rally since January 2009 and oil futures in New York increased to the highest level in 11 weeks. Commodities also rose after European governments moved closer to containing the region’s debt crisis.

Industrial metals in London jumped the most in three years, led by copper and nickel, as European leaders outlined plans to aid banks and ruled out borrowing unlimited amounts from the European Central Bank to boost a rescue fund. Chinese manufacturing may expand in October, ending the longest contraction since 2009, according to a preliminary index of purchasing managers by HSBC Holdings Plc and Markit Economics.

“China may not be suffering a hard landing or even as much of a harsh landing as previously thought,” said Aakash Doshi, a commodity strategist at Citi Global Markets in New York. “Overall, you have risk appetite in commodities being buttressed by policy makers in Europe really paying attention to sovereign restructuring and bank recapitalization plans.”

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October 24th, 2011

Hedge funds increased bullish bets on commodities by the most since August on mounting optimism the global economy will avoid another recession, boosting prospects for raw-materials demand.

Money managers raised combined net-long positions across 18 U.S. futures and options by 12 percent to 737,647 contracts in the week ended Oct. 18, Commodity Futures Trading Commission data show. Wagers increased most in energy and agriculture, led by heating oil, gasoline, coffee and soybeans.

The Standard & Poor’s GSCI gauge of 24 commodities climbed 7.4 percent in October, on track for the biggest monthly advance this year, as European leaders moved closer to resolving the region’s debt crisis. Reports last week showed U.S. housing starts jumped to the highest since April 2010 and manufacturing unexpectedly accelerated, increasing investor confidence that the world’s largest economy isn’t tipping back into recession.

“People are looking around saying, ‘You know what, the world isn’t ending,’” said John Stephenson, a senior vice president and fund manager at First Asset Investment Management Inc. in Toronto, which manages $2.7 billion of assets. “It’s time to buy some commodities.”

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October 14th, 2011

Global stocks surged, extending the biggest weekly rally since July 2009, as the Group of 20 began talks to tame Europe’s debt crisis and U.S. retail sales and Google Inc.’s results beat estimates. Commodities rose and the euro headed for the best weekly gain since January.

The Standard & Poor’s 500 Index climbed 0.8 percent at 10:21 a.m. in New York as Google Inc. jumped 6.3 percent. The Dow Jones Industrial Average extended a third straight weekly advance, its longest streak since April. Copper added as much as 3.8 percent as the S&P GSCI Index of 24 commodities climbed 2.3 percent. Ten-year Treasury note yields rose five basis points to 2.24 percent. The euro was at $1.3880, up 3.8 percent this week.

The MSCI All-Country World Index extended its weekly advance to 5.2 percent as elements of the European rescue plan emerged with finance officials from the G-20 beginning talks in Paris. The bigger-than-forecast 1.1 percent increase in U.S. retail sales last month eased concern that slumping consumer confidence will hurt spending, while Google’s earnings showed growing demand for online advertising.

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October 5th, 2011

Gold futures rose for the third time in four sessions on demand for a haven amid persistent concerns that Europe’s debt crisis will hinder the global economy.

Yesterday, Italy’s credit rating was cut for the first time in almost two decades by Moody’s Investors Service, which said that other euro-area nations ranked below the top Aaa level may have their grades lowered amid contagion from the region’s budget woes. Wheat and corn led a rally in raw materials on signs the U.S. may take more step to bolster a recovery.

“People are buying gold as proxy for fear,” Adam Klopfenstein, a senior market strategist at MF Global Holdings Inc. in Chicago, said in a telephone interview. “Also, the strength in the commodities pack is helping gold.”

Gold futures for December delivery gained $25.60, or 1.6 percent, to settle at $1,641.60 an ounce at 1:42 p.m. on the Comex in New York. Earlier, the metal fell as much as 1.2 percent.

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October 5th, 2011

Corn futures advanced for the first time in four days on speculation that a 26 percent slump from this year’s high to yesterday’s close may attract importers seeking to rebuild stockpiles.

China, the world’s second-largest user, may need to import between 5 million and 10 million metric tons before the end of 2012 to replenish corn inventories, Thomas C. Dorr, president of the U.S. Grains Council, said yesterday.

“A number of analysts estimate China’s corn import requirements will be greatly above the numbers given by the U.S. Department of Agriculture, and that China could have an import need in the 2011-12 marketing year of between 5 million and 10 million tons,” Paris-based farm adviser Agritel said in an online comment.

Corn futures for December delivery gained 9.25 cents, or 1.6 percent, to $5.97 a bushel at 1:15 p.m. London time on the Chicago Board of Trade. Futures have plunged from a three-year high of $7.93 on June 9, touching $5.7225 on Oct. 3, the lowest level since December.

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October 3rd, 2011

Commodities fell to a 10-month low on increasing concern that stagnant global growth will crimp demand for metals, energy and agriculture.

The Standard & Poor’s GSCI Spot Index dropped 5.38, or 0.9 percent, to close at 585.62, after touching 580.22, the lowest since Dec. 1. The gauge tumbled 12 percent in the third quarter, the most since the final quarter of 2008.

Global equities slumped on concern that Europe’s debt crisis will worsen and derail expansion. The GSCI Index has lost more than 20 percent since reaching an almost three-year high in April as slowing growth reduced the chances of shortages for raw materials. Money managers cut bets on a commodity rally 26 percent in the week to Sept. 27, the most in almost three years, government data show.

“People are worried about a global slowdown and a double dip,” Donald Selkin, the chief market strategist at National Securities Corp. in New York, said today in a telephone interview. “Funds are selling.”

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October 5th, 2011

Crude oil futures rose for the first time in four days after the U.S. government reported an unexpected stockpile decline in the world’s biggest crude-consuming country.

Crude oil futures climbed as much as 4.9 percent after the Energy Department said supplies fell 4.68 million barrels to 336.3 million last week. Inventories were forecast to increase 1.5 million barrels, according to a Bloomberg News survey. Fuel stockpiles also dropped in the week ended Sept. 30. Oil also rose as U.S. companies added more jobs than forecast last month.

“The DOE report is bullish, any way you look at it,” said Carl Larry, director of energy derivatives and research with Blue Ocean LLC in New York. “The key to where prices move from here is the economy.”

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