commodity investing 101

commodity investing 101

October 5th, 2015

Commodity investing funds undertook a sharp wave of short-covering as pessimism over agricultural commodity prices waned, particularly in sugar, in which they turned more positive on prospects at the fastest pace in 15 months.

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 cotton, by 100,285 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.

The shift took the net long – the extent to which long bets, which profit when values rise, exceed short holdings, which benefit when prices fall – to 125,025 contracts.

And it was fuelled by a cut in short positions, of more than 90,000 lots, amid recovering markets for many agricultural commodities, with only cattle and cocoa among main contracts showing losses during the week.

The closure of short positions was evident in a cut to 1.38m lots, from 1.42m contracts, in speculators’ open interest – the total number of live contracts they hold.

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El Nino here for rest of 2015

On September 15, 2015, in Commodity Futures News Report, by Infinity Trading
commodity investing 101

commodity investing 101

September 15th, 2015

The El Nino will not fade until next year, official meteorologists in Australia warned, even as real estate experts rated a continuation in the weather pattern a key fear for farmers in New Zealand, the top milk exporting country.

Australia’s official weather bureau, which two weeks ago rated the El Nino the strongest since 1997-98, on Tuesday gave its first detailed forecast of when the weather pattern might fade – putting its demise into 2016.

“El Niño continues to strengthen,” the Bureau of Meteorology said.

Evidence from factors such as trade winds and Pacific water temperatures “indicate the El Niño is unlikely to end before early 2016″.

Indeed, “all models suggest the event will peak around the end of the year [2015], followed by rapid weakening” heading into the southern hemisphere autumn – ie, early in 2016.

“It is too early to accurately determine the likely pattern beyond [southern hemisphere] autumn, but a continued El Niño is considered the least likely outcome at this stage,” the bureau added.

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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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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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commodity brokers

commodity futures

September 9th, 2013

Commodity Futures – Hedge funds’ combined holdings in gold futures increased to the most bullish since January on mounting concern that conflict in the Middle East will boost crude-oil prices, slowing economic growth and stoking inflation.

The net-long position rose 3.6 percent to 101,396 futures and options in the week ended Sept. 3, U.S. Commodity Futures Trading Commission data show. Long wagers gained 0.6 percent and short bets contracted 8.6 percent, the fourth consecutive drop and the longest retreat in a year. Combined net-long holdings across 18 U.S.-traded commodities fell 0.3 percent as investors got less bullish on copper.

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