commodity investing 101

commodity investing 101

November 21st, 2016

Hedge funds turned bearish on agricultural commodities at the fastest rate in nine months, provoking hopes in grains that selling pressure may be spent for now – but spurring worries in sugar of “much lower” prices.

Managed money, a proxy for speculators, lifted its net long position in futures and options in the top 13 US-traded agricultural commodities, from corn to sugar, by 151,096 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.

That represented the biggest reduction since February in the net long – the extent to which long bets, which profit when values rise, exceed short holdings, which benefit when prices fall.

And it came in a week in which ag bulls suffered two notable blow – the first from the rise in the dollar, following the election of Donald Trump as US president, and the second from larger-than-expected official estimates for US corn and soybean crops.

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ICE Futures U.S. news

ICE Futures U.S. news

December 3rd, 2014

Intercontinental Exchange Inc. ICE Futures  will start its first five futures contracts to be listed and cleared in Singapore next year, including products on the Chinese currency, Brent crude and gold.

A mini contract on the European energy benchmark as well as products on the yuan, Chinese cotton and sugar will be cash-settled, while a one-kilogram gold contract will be physically settled, Atlanta-based ICE said. Trade will start on March 17, subject to regulatory approval from the Monetary Authority of Singapore, it said in a statement today.

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March 7th, 2014

Commodities: As the hip-hop duo Outkast once opined, “You can plan a pretty picnic, but you can’t predict the weather.” Big Boi and Andre 3000 could’ve been describing the commodity markets so far this year.

From drought in Brazil to the arctic blast that swept across North America, extreme weather drove coffee, sugar and natural gas into bull markets just as escalating political tension in Ukraine created supply risks for energy and grains. The rally for raw materials was a surprise to banks from Citigroup Inc. to Goldman Sachs Group Inc. that had forecast 2014 would mark a continuation of last year’s slump.

Commodity funds recorded inflows of $1.57 billion last month, the first gain since September, after withdrawals last year reached a record $43.3 billion, according to EPFR Global, a Cambridge, Massachusetts-based researcher. Investors who shunned gold as the metal slumped into a bear market in 2013 increased holdings through exchange-traded funds in February for the first time since 2012. Dryness in Brazil erased the prospect of a record coffee crop as prices jumped, after the longest slide in two decades.

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Crude Oil Climbs From One-Week Low

On February 23, 2014, in Crude Oil Futures News Report, by Infinity Trading

February 23rd, 2014

Crude oil west texas intermediate crude rose from the lowest price in a week amid speculation that cold weather in the U.S. will boost energy demand in the world’s biggest oil consumer. Brent in London gained.

Oil futures increased as much as 0.5 percent in New York, snapping two days of declines. Frigid arctic air will make a return to the Northeast and Midwest this week, according to AccuWeather Inc. Distillate inventories, a category that includes heating oil and diesel, dropped to the lowest level since November in the period ended Feb. 14, the Energy Information Administration said last week.

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commodity investing

commodity futures

Commodity hedge funds cut bullish gold bets, adding the most short contracts in four weeks, as U.S. economic growth fuels speculation the Federal Reserve will trim stimulus. Holdings across commodities dropped the most since April.

The net position in gold slid 13 percent to 87,689 futures and options in the week ended Nov. 5, U.S. Commodity Futures Trading Commission data show. Short bets jumped 37 percent, the most since Oct. 15, and long wagers fell 4.9 percent. Combined holdings across 18 U.S.-traded commodities dropped 20 percent to 658,263 contracts as investors cut cotton positions to the lowest this year and crude-oil bets to the fewest since June.

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October 30th, 2013

U.S. stocks fell, following a third straight record for the Standard & Poor’s 500 Index, after the Federal Reserve said it sees improvement in economic activity even as it maintained unprecedented stimulus.

The S&P 500 fell 0.8 percent to 1,758.67 at 2:25 p.m. in New York, extending a 0.3 percent decline prior to the Fed statement. The index advanced in 13 of the past 15 sessions through yesterday and has jumped 24 percent this year, on track for its best annual gain since 2003. The Fed stimulus helped propel the benchmark gauge higher by more than 160 percent from a 12-year low in 2009.

“Taking into account the extent of federal fiscal retrenchment over the past year, the committee sees the improvement in economic activity and labor market condition since it began its asset purchase program as consistent with growing underlying strength in the broader economy,” the Federal Open Market Committee said.

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October 29th, 2013

Corn futures reached a three-year low in Chicago as harvesting of the grain accelerated in the U.S., the world’s biggest producer, and crop conditions improved.

Farmers gathered 59 percent of crops in the main growing areas as of Oct. 27, compared with 39 percent a week earlier, the U.S. Department of Agriculture said yesterday. Sixty-two percent of crops were in good or excellent condition, up from 60 percent a week earlier that received the top ratings. The U.S. may produce a record 13.8 billion bushels this season, the USDA said in September. Its next forecast is due Nov. 8.

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October 18th, 2013

Commodity Futures – Russia may lose 4 million metric tons of wheat from its potential harvest after rains restricted planting of winter crops, the Institute for Agricultural Market Studies said.

Winter-crop sowing in the Central Federal District will fall 25 percent short of the original target, and farmers in the Volgograd and Rostov regions in the south will also plant less grain than planned, Dmitry Rylko, director of the Moscow-based researcher, also known as IKAR, said in a phone interview yesterday. The area planted with winter crops by Russian farmers was 20 percent smaller than last year as of yesterday, Agriculture Ministry data show.

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October 14th, 2013

Reneging on its debt obligations would make the U.S. the first major Western government to default since Nazi Germany 80 years ago.

Germany unilaterally ceased payments on long-term borrowings on May 6, 1933, three months after Adolf Hitler was installed as Chancellor. The default helped cement Hitler’s power base following years of political instability as the Weimar Republic struggled with its crushing debts.

“These are generally catastrophic economic events,” said Professor Eugene N. White, an economics historian at Rutgers University in New Brunswick, New Jersey. “There is no happy ending.”

The debt reparations piled onto Germany, which in 1913 was the world’s third-biggest economy, sparked the hyperinflation, borrowings and political deadlock that brought the Nazis to power, and the default. It shows how excessive debt has capricious results, such as the civil war and despotism that ravaged Florence after England’s Edward III refused to pay his obligations from the city-state’s banks in 1339, and the Revolution of 1789 that followed the French Crown’s defaults in 1770 and 1788.

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commodity brokers

commodity futures

September 12th, 2013

Commodity demand in China, the world’s largest user of iron ore, copper and tin, will rebound through the end of the year as infrastructure projects gather pace and users restock, according to Goldman Sachs Group Inc.

The key demand driver is infrastructure and fixed-asset investment, analyst Julian Zhu told reporters at a briefing in Singapore today. Steel prices in the world’s largest producer were seen higher through the end of December, Zhu said.

Goldman’s assessment adds to signs that a slowdown in the second-largest economy may be ending, lifting the outlook for commodities from iron ore to base metals. While Premier Li Keqiang said yesterday that the foundations of a recovery aren’t solid, policy makers have signaled that they will defend a 7.5 percent expansion goal for 2013. Bank of America Merrill Lynch today raised its growth forecast for China.

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