| Oil slips as Opec gathers in Saudi Arabia
Commodities came under pressure on Monday as a wave of risk aversion swept across markets, dragging energy, metals and agricultural prices lower. Oil fell sharply at the start of a crucial week with crude prices in sight of the key $100 level as delegates began to gather for a historic meeting of the Organisation of the Petroleum Exporting Countries. .
Aluminium gains, agris spike, crude witnesses profit-taking
MUMBAI: The commodity markets were volatile last week as the surprise Fed move on interest rates caused short-term turbulence. The immediate reaction was a short-term upmove on select base metals as the industrial outlook (at least as a perception) improved and shorts were squeezed. The bullion outlook, too, improved as hedge fund activity was seen driving prices higher. Select agri-commodities spiked higher and the outlook was slightly more upbeat compared with the previous week. MCX volumes fell 2% and open interest tripped by a similar amount on a week-on-week basis. Turnover gainers were copper, mentha oil, potato, zinc and aluminium. Open interest gainers were natural gas, zinc, refined soya oil and chana. Agri-commodities
Chana has established Rs 2,100 level as a critical support and as long as this threshold is not violated downwards, the outlook remains optimistic.
Platinum Hits Record High Yet Again; Wheat Also Jumps To All-Time High
Platinum hit record highs for a third straight session on Monday amid output woes in South Africa and inflation from pricier oil. Wheat also peaked for a third day running on heavy speculative buying. Copper prices ended up but off their highs after a large earthquake in Chile, the world's biggest producer of copper and home to a wide array of industrial metal deposits. Leading commodity indexes such as the Reuters-Jefferies CRB, S&P GSCI and Dow Jones-AIG all rose about 1% each. Fundamentals aside, investors were drawn to commodities after Wall Street stocks slid on uninspiring U.S. factory orders for December which came in below expectations but not weak enough to spark a broad market shake-up. A weaker U.S. dollar against the euro also bolstered the case for buying inflation-sensitive commodities, particularly precious metals like gold and platinum.
Import difficulties outweigh recession fears
Commodities took off on Monday after their weak performance on Friday. In the oil market the uncertain prospects of economic growth in the US had been pushed to the background for a time, and focus was on import problems in Texas and Louisiana. All passage of tankers to the country's most important oil terminal was halted because of dense fog. The difficulties helped to send oil as high as USD 90.83, and oil closed the day up by 1.2%. Subsequently it was possible for a few tankers to move in, which put pressure on oil. This morning, however, all activity is again reported to be at a standstill. Copper and aluminium both gained almost half a percentage on a day when the Asian coal prices hit a new record. The tight coal market has caused suspension of an appreciable portion of the production of base metals in both China and South Africa.
Autogyro Money?
The blaming of a $7 billion hit to SoGen on one trader seems to be taking our old observation that "The bigger the trading loss-the more unauthorized the trade" to hitherto unimaginable levels. The full story is not out yet. However, considering the enormity of widespread losses, dire exclamations would be natural, but have been subdued, or perhaps we missed some. Or maybe, the lack is indicating that the worst will be discovered over the next hill. Last Year: "Credit Woes Chip at Banks" "Even as the big banks crank out double-digit earnings gains, weakening in credit quality is showing up." - Wall Street Journal, January 18, 2007 "Conservative Investors Line Up For Junk Bonds" "The junk-bond market is undergoing a sort of gentrification, appealing to more conservative investors, who like many in the current low-yield environment, are starved for higher returns." - Wall Street Journal, January 20, 2007 The old "reaching for the extra 1/8th in yield" is always and inevitably a killer.
Wall Street rallies on optimism about rate cuts
Earlier in the day, U.S. oil futures set an intraday record above $101. In contrast, Tuesday's record high in oil, however, caused a late-day sell-off in stocks. Shares of Chevron Corp <CVX.N>, which began trading as a Dow component on Tuesday, rose 1.8 percent to $86.34 on the New York Stock Exchange. Chevron was among the major advancers in both the Dow and the S&P 500. Shares of HP, which reported quarterly profit that beat Wall Street's estimates late on Tuesday, climbed to $47.44, while IBM shares rose to $107.85. On the Nasdaq, shares of mobile phone chip maker Qualcomm Inc <QCOM.O> led advancers with a gain of 3.4 percent to $43.37. Minutes from the Fed, which cut the target for its benchmark rate by half a percentage point to 3 percent at the January meeting, said it had lowered its growth forecast for 2008.
Dubai wants to launch world's first tea futures contract
Dubai: Dubai wants to launch the world's first tea futures contract if it finds favourable response among major tea producers and other key industry participants, officials said on Tuesday.
They argued that international tea trade will benefit from a "well-functioning futures market" as it would provide a good pricing guidance for the commodity. "If there is a possibility of a successful tea futures contract, then Dubai might be the place for it since we are ideally positioned between the tea producing and major consuming countries," Dubai Multi Commodities Centre chief executive officer David Rutledge told Gulf News. However, experts said it would not be easy to create a benchmark for a tea futures contract because of the wide variety grown in various countries.
Gov’t loses Danding shares in San Miguel
The Sandiganbayan First Division dismissed Wednesday the government's claim to 17-percent stake in San Miguel Corp. making its chairman Eduardo "Danding" Cojuangco the undisputed owner of the stocks. The decision, which came after a two-decade dispute and is open to appeal, allows Cojuangco to sell his shares if he wants to. The shares originally represented 20 percent of SMC, before it was diluted by a rights offer. The government said earlier it wanted to sell next year another block of SMC shares representing about 24 percent of the company, after a final ruling on the ownership of the stake. The Court awarded that block to the government, but coconut farmers claiming the shares filed an appeal. In a 55-page decision, penned by Associate Justice Diosdado Peralta, the Sandiganbayan said Wednesday it dismissed the government's claim to the disputed shares due to lack of evidence.
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