Commodities Buzz: Fed Taper Unlikely To Affect Crude Oil Prices Significantly Says Russian Minister

The latest announcement by Ben Bernanke, chairman of the US Federal Reserve, about plans to reduce stimulation of the US economy won't significantly affect oil prices, Russia Deputy Economic Development Minister Andrei Klepach has stated, according to media reports. Oil prices will only be affected if the US economy slows down significantly, a scenario that he thinks is unlikely, Klepach stated in a forum. The ministry estimated the average oil price for 2013 at $105 per barrel. The minister said the government would have the final word on the issue of increasing oil supplies to China via the Eastern Siberia-Pacific Ocean pipeline. The agreement foresees the supply of an additional 800,000 tons of oil to China in 2013 and two million tons the next year.

Source by Commodity Insights

Gold Settles After A Strom

Gold.........

Gold futures

are trading slightly higher in Asia electronic trading today aided by weakness in the US Dollar. Yesterday, it collapsed by more than 6% as investors continued to price in the Federal Reserve’s possible trimming of its monetary stimulus later this year.

After settling Nymex trade at $1,286.20 an ounce — the lowest close since September 2010 — August gold took further damage on news exchange operator CME Group Inc. CME was hiking margin requirements.

The CME, which owns the Nymex’s metals-trading Comex division, said following Thursday’s close that it would hike initial and maintenance margins for gold by 25%, according to reports. The CME's decision came after August gold futures plunged $87.80, or more than 6%, to end at $1,286.20 an ounce on Thursday, the futures' lowest closing level since September 2010. The new margins would come into effect after Friday’s close, CME said.

Gold for August delivery is trading up $3 at $ 1289.2 an ounce on the COMEX division of the New York Mercantile Exchange. The contract had tumbled to as low as $1275.4 an ounce marking its lowest level in 2 ½ years.

By late morning in East Asia, the ICE dollar index had edged down to 81.642 from its 81.823 level late Thursday. The dollar had rallied since the Federal Reserve’s statement late Wednesday, signaling it could slow its asset purchases this year if the economy improves further.

A weaker U.S. currency tends to support gold and other dollar-denominated commodities, as it makes them less expensive for holders of euros, yen and other units.

MCX August gold futures may open today’s session near Rs 27000 with resistance near Rs 27100 levels and support near Rs 26700 levels.

Source by Commodity Insights

Commodities Buzz: CME Raises Initial Margins On Gold Futures By 25%

The CME Group Inc. on Thursday raised the initial margins on trading in gold futures by as much as 25%, according to reports. The CME's decision came after August gold futures plunged $87.80, or more than 6%, to end at $1,286.20 an ounce on Thursday, the futures' lowest closing level since September 2010. The CME Group Inc. on Thursday raised the initial margins on trading in gold futures by as much as 25%, according to reports.

Source by Commodity Insights

Commodities Buzz: UK Wheat Imports Maintain Their Pace

UK wheat imports continue to fascinate the global grain markets. UK, usually a net exporter of wheat, imported 255,785 tonnes of the grain in April, taking total buy-ins to 2.38m tonnes in first ten months of the crop year (July-June), far exceeding outward shipments of less than 609,000 tonnes. Last month, the UK lifted its estimate for wheat imports following poor weather which has boosted demand for the grain, besides cutting yields last year to a 20-year low. The UK farm ministry, Defra, upgraded its forecast for UK wheat imports in 2012-13 by 275,000 tonnes to 2.54m tonnes- marking a rise of 10%.

The upgraded figure is far bigger than exports, which Defra pegged at 800,000 tonnes in its official forecast. The upward estimates also reaffirmed the UK's unusual slip into net imports of wheat. The estimate for feed use, however, was raised, by 229,000 tonnes to 6.69m tonnes, reflecting the lingering impact from the poor weather last year, the UK's second wettest on record, in boosting demand besides lowering yields.

The wet summer/autumn and delayed spring have necessitated an increase in the use of grain for animal feed in place of forage and grazing, Defra noted. The continuation of the poor weather into a cold spring has also prompted by stockpiling, over fears of a late harvest and delayed new-crop supplies. Commercial end-season stocks were seen soaring 29% to 1.94m tonnes as of the end of 2012-13, in part thanks to uncertainty over the approaching 2013 harvest, according to Defra.
Source by Commodity Insights

Economic Buzz: New Zealand Economy Grows Annually 2.50% In Q1

Gross domestic product (GDP) rose 0.3 percent in the March 2013 quarter, with the Canterbury rebuild and the 2013 drought having offsetting effects, Statistics New Zealand said today. This modest growth in economic activity follows a rise of 1.5 percent in the December 2012 quarter. Economic activity for the year ended March 2013 was up 2.5 percent when compared with the March 2012 year.Source by Commodity Insights

Copper Crushed Below $ 7000 On Wednesday Trades

Copper.......

Copper crushed below $ 7000 per tonne on Wednesday as the weight of FOMC decision seemed to be taking the toll on the metal. Federal Reserve Chairman Ben Bernanke will be speaking on the plans of monetary stimulus programme. LME metal three month prices of Copper were trading at $ 6998 per tonne when last checked which almost a two month is low for the metal.
Indian Copper futures ended the trading at Rs 410.1 per kg, up 0.16 percent. The prices tested a high of Rs 412.7 per kg and a low of Rs 408.6 per kg. The metal is expected to open lower considering the slowdown in LME and fall in Dollar against the Indian Rupee. INR was trading at 58.73 against the Dollar, up 0.07 percent.
Meanwhile, Central bank in China has said that there will not be any policy loosening. People's Bank of China (PBoC) Tuesday drained 2 billion yuan from the money market despite banks' reported call for cash injection, suggesting regulators are keen to keep liquidity tight amid growing jitters of China's financial risks. The 2-billion 91-day bills, though tiny by amount, were viewed as the central bank's commitment to squeezing out excessive funding.
China manufacturing data is also keenly watched by the traders as that will show the state of affairs in terms of demand for metals. In fundamental news, the possible restart of mining operations at Freeport Indonesia's Grasberg mine could pare the supply disruption premium factored into copper prices
Source by Commodity Insights

Gold In Cautious Mode Ahead Of Fed

Gold........

Gold futures are trading in a cautious mode today as traders remain uncertainty that how long the central bank will maintain its $85 billion a month in bond purchases.
Investors are closely watching for any comments by the Fed about the future of its program of purchasing $85 billion a month in bonds, which is intended to stoke economic growth. The Fed will conclude its two-day meeting Wednesday and Fed Chairman Ben Bernanke will hold a news conference.
On the data front today, Japan's exports surged in May, as the yen traded at its weakest levels of the year, with the result leading to a smaller-than-expected trade deficit. Japanese exports rose 10.1% from a year earlier, the Finance Ministry reported Wednesday.
Gold for August delivery is trading down $1 at $ 1366 per ounce on Comex Division Of New Yrok Mercantile Exchange.
It dropped $16.20, or 1.2%, to close at $1,366.90 an ounce in Nymex floor trading as Fed officials began a two-day monetary-policy meeting. During the session, gold traded as low as $1,360.20, the lowest level for a most-active futures contract since May 23.
Economic data on Tuesday offered a mixed bag for Fed experts. Housing starts rebounded by a stronger-than-expected 6.8% in May, but consumer price inflation was more subdued than expected, posting a monthly rise of 0.1%.
MCX August gold futures may open today’s session below Rs 28000 with support around Rs 27850 levels and resistance near Rs 27970-90 levels.
Source by Commodity Insights

Economic Buzz: New Zealand's Q1 Current Account Deficit Drops

Statistics New Zealand said that New Zealand's current account balance fell to a seasonally adjusted -NZD 0.66B, from - NZD 3.26B in the preceding quarter. Analysts had expected New Zealand's current account balance to fall - NZD 0.60B in the last quarter.
Source by Commodity Insights

Oil Slips Ahead Of FOMC Outcome

Oil.......
Crude oil futures slipped along with the weak Asian equities on caution ahead of the Federal Reserve’s monetary-policy decision later in the day.

In Asia today, the Nikkei Stock Average outperformed regional markets by a wide margin, finishing the morning trading session 1.3% higher at 13,169.97. Australia’s S&P/ASX 200 gained 0.4%, and Taiwan’s Taiex added 0.2%. On the downside, the Shanghai Composite fell 1.5%, Hong Kong’s Hang Seng Index dropped 0.8%, and South Korea’s Kospi also eased 0.8%.
Crude for July delivery are trading 8 cents at $ 98.39 per barrel on the New York Mercantile Exchange. Yesterday, it added 67 cents, or 0.7%, to settle at $98.44 a barrel as Mideast tensions supported prices and fall in the crude oil supplies.
U.S. crude supplies dropped by 4.3 million barrels for the week ended June 14, the API said. A Platts survey of analysts forecast a 1 million-barrel decline. Gasoline inventories increased by 900,000 barrels, while distillate stockpiles dipped by 600,000 barrels. Analysts were looking for a rise of 1.2 million barrels in gasoline inventories and an increase of 300,000 barrels in distillate supplies.
More closely watched figures from the U.S. Energy Information Administration (EIA) are due Wednesday at 10:30 a.m. Eastern. Also, Bernanke is scheduled to hold a press conference Wednesday after the conclusion of the Fed’s two-day policy meeting, which will start later Tuesday.
Syria is also in focus for energy investors, with the U.S. saying late last week it would increase aid to Syrian rebels who have been fighting against the regime of President Bashar al-Assad in a bloody civil war. U.S. oil futures on Friday surged 1.2% following the development.
MCX July crude oil futures may open today’s session near Rs 5790 levels with support around Rs 5745 levels.
Source by Commodity Insights

Indian Rupee Slips Back Below 58/$ Mark

The Indian rupee plunged once again, breaching the Rs 58 per dollar mark on Tuesday, June 18, 2013 due to renewed dollar demand from importers and appreciation of the US currency overseas. Meanwhile, a weak opening in the domestic stock market also put pressure on the rupee as investors await the outcome of a US Federal Reserve meeting due this week. The domestic currency opened weaker by 36 paise at Rs 58.23 to a dollar, registered an intraday high of 58.22 before slumping back to a low of 58.46 so far during the day. In the spot currency market, the Indian unit was last seen trading at 58.4250, lower by around 56 paise or near 1% as compared to previous close at 57.87.

Rupee fell on Monday as the central bank kept interest rates on hold and on caution ahead of the U.S. Federal Reserve's meeting this week, although a lower-than-expected trade deficit helped to cap the currency's losses. The Reserve Bank of India kept its repo rate steady, warning of upwards risks to inflation and global economic uncertainty, in a decision that had been widely expected. A rate cut benefits the rupee by increasing confidence on the economic outlook and sparks hopes of more foreign inflows. Meanwhile, markets are keenly awaiting US Federal Reserve's meeting on Wednesday where the US central bank will give guidance on its bond buyback programme. Fed action is likely to determine the rupee's further course. If US withdraws its bond buyback programme, rupee may slide further.

Meanwhile, a bout of volatility was witnessed in early trade as key benchmark indices slipped into the negative terrain after opening slightly higher. Asian shares were pressured on Tuesday despite an overnight rise in global markets, with investors awaiting for news of the Fed's plans for its stimulus programme from the two-day monetary meeting starting later in the session. Foreign institutional investors (FIIs) sold Indian shares worth a net Rs 165.09 crore on Monday, 17 June 2013, as per provisional data from the stock exchanges. At the time of writing, the S&P BSE Sensex was down 78.39 points or 0.41% to 19,247.48 while the CNX Nifty was down 23.90 points or 0.41% to 5,826.15.

The U.S. dollar hovered above a two-month low against the yen on Tuesday but uncertainty ahead of the outcome of the U.S. Federal Reserve meeting is likely to cap further gains. The euro stayed above 1.33 to the dollar. The dollar index was sub 81 mark. However, the yen slipped slightly against the dollar.

Source by Commodity Insights