Tuesday, September 30, 2008

Some Say Wait on Commodities Till Things Settle Down

The volatility in the economy, especially in relationship to base metals, gold and oil, have some experts saying investors should wait for a few days until things unwind and there's more clarity in the overall picture. I also think that's the best thing to do in current circumstances.

There are too many variables not usually connected to the market that make things at this time more unpredictable than usual.

With fear being a main driver at this time, we have to be cautious in what we do, as the rejection of the bailout package in America suggests.

Fear is being used as a tool by some now to get things done in the way they want them done. With this in mind, it makes it impossible to know with any reasonable accuracy in the short term which way things will go.

Even many analysts, normally glad to be in the spotlight, were quiet on Monday, as anything they say could go the opposite direction with ease.

I would wait a few days to allow things to settle down.

Friday, September 26, 2008

Commodity Prices Holding Back Canadian Dollar

The Canadian dollar has enjoyed a 4 percent gain against the greenback over the last couple weeks as U.S. financial conditions continue to falter.

Even so, the resultant decline in commodity prices has kept the loonie from making any more gains over the last couple days as it has remained flat against the U.S. dollar.

With politicians battling over the proposed bailout, pressure on the U.S. dollar will remain until it's resolved and the final package revealed.

With over half of all Canadian exports being commodities, things will remain flat until the decision is made concerning the possible bailout and the specifics of it.

The Canadian dollar seems to have settled at around C$1.03 to the U.S. dollar during this period of time.

[Most Recent Exchange Rate from www.kitco.com]

Thursday, September 25, 2008

Lind-Waldock in "Commodities are Everywhere" Campaign

CHICAGO, Sept 25, 2008 /PRNewswire via COMTEX/ -- Lind-Waldock, the premier futures broker for individual investors, has launched a new print, online and television campaign, "Commodities are Everywhere," to raise awareness about the many global opportunities in the commodities markets that investors may be missing -- no matter which direction prices are headed. Individuals can learn more about how commodities affect their everyday lives and the ways they can trade and invest in these markets at http://www.CommoditiesAreEverywhere.com.

Commodities are literally all around us, in everything we see, smell, and touch in our daily lives. People use products like gasoline, corn, and coffee every day, but might not realize they can trade and invest in them too as part of a diversified investment portfolio. Lind-Waldock offers individuals access to more than 700 global physical commodity and financial futures markets through its state-of-the-art electronic trading engine.

"There's never been a better time to be involved in the commodity markets -- it's been an incredible year. Products like crude oil, corn, soybeans and gold have all risen to record highs in 2008. Investors who were participating in these markets found commodity futures to be a valuable diversification tool as the stock market and housing prices in many areas of the country declined," said Mark Sachs, President of Lind-Waldock.

Even if many commodities markets turn into a bearish cycle in 2009, investors can still benefit from continued opportunities, because unlike stocks, commodity futures offer the ability to take short, or bearish positions, with equal ease as long, or bullish positions. That means returns are not dependent on a particular price direction. And, while volatility can certainly create losses for investors, it can also offer opportunities, too.

Many Ways to Participate in Commodities with Lind-Waldock

Many investors think commodity futures and options are only accessible to large, sophisticated institutional market participants and professional traders. But that's not the case.

Lind-Waldock has been catering to the needs of individual investors for more than four decades, and provides market access for large or small account sizes. Independent trading is offered through its Self-Directed division, while broker-assisted trading is available through its Lind Plus division ( http://www.lind-waldock.com/services/plus.shtml). For a more hands-off approach, access to professionally developed trading systems is available through its Auto-Execute Services division, or for individuals who want a professional trading advisor to make all the decisions, its Managed Futures division ( http://www.lind-waldock.com/services/managed_futures.shtml).

"No matter what level of experience an investor has, there is a way to participate in commodity futures markets. While futures trading may not be right for everyone, we strive to educate individuals every step of the way so that they can make an informed decision. Our 'Commodities are Everywhere' campaign is part of that effort," said Sachs.

Lind-Waldock is proud to be the leader when it comes to global futures trading for individual investors, offering unparalleled service and support for clients, including live customer service 24 hours during the trading week.

About Lind-Waldock

Lind-Waldock is the leading futures broker for individual traders and investors. The firm has been in business since 1965 and conducts business for thousands of clients on futures exchanges around the world, offering access to electronic, open-outcry and EFP markets.

The firm offers a variety of educational resources for traders and investors including a book, The Complete Guide to Futures Trading, a monthly futures trading e-newsletter, educational free webinars available live, as well as archived via video and audio podcasts, information via RSS feeds, and free simulated trading and free commodity quotes and charts on its Web site at http://www.lind-waldock.com.
Lind-Waldock is located at 141 West Jackson Boulevard, Suite 1400-A, Chicago, IL 60604. Call 800-445-2000 for information.

Futures trading involves the substantial risk of loss and is not suitable for all investors.

SOURCE Lind-Waldock

Copyright (C) 2008 PR Newswire. All rights reserved

Coffee Exception to Commodities Weakness

While most commodities have been plunging in price, coffee has remained strong, and has grown in August's producer price index basket by 12.6 percent on a month-to-month basis.

According to the International Coffee Organization, the jump in August prices was significantly influenced by the hurricanes' impact om coffee plantations in important Caribbean areas.

The ICO added that coffee is primarily moving on supply-and-demand factors, and speculation plays little role in the existing price moves.

In other coffee news Brazil should end up with a record crop this year, although it's not clear at this time whether that will result in higher exports, as Brazilian demand for coffee is high internally.

Bank of New York Mellon Corporation Says Commodity Investors Need to be Highly Selective Until Global Economy Recovers

Sept 25, 2008 /PRNewswire-FirstCall via COMTEX/ -- Investors will need to be highly selective in their allocations to commodities until the global economy recovers, which is expected to occur by 2010, according to a forthcoming white paper from The Boston Company Asset Management (TBCAM), an investment boutique within BNY Mellon Asset Management.

"We would maintain a modest allocation to commodities at this time, and then aggressively increase our positions at the first sign of a recovery," said Robin Wehbe, an equity research analyst at TBCAM. "We believe commodities are poised to hit new highs once a recovery begins to gather momentum."

Until the recovery, TBCAM would look closely at select commodities that require particularly long lead times to add capacity or face challenging geological hurdles. As examples, the TBCAM white paper noted that iron ore used in the production of steel and potash, a fertilizer nutrient, require tremendous investments to make extraction economical. Ramping up production for these two commodities can take seven years or longer.

"Focusing investments on commodities with tight fundamentals and producers with low-cost positions is the right approach for these markets," said Wehbe. "Companies with low-cost positions will enjoy an extended period of above-normal profitability and cash flow."

The Boston Company Asset Management, a BNY Mellon Asset Management investment boutique, provides investment management services for corporate, public, mutual funds and Taft-Hartley retirement plans, endowments and foundations.

The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has more than $23 trillion in assets under custody and administration, more than $1.1 trillion in assets under management and services $12 trillion in outstanding debt. Additional information is available at bnymellon.com.
SOURCE The Bank of New York Mellon Corporation

BNY Mellon

Copyright (C) 2008 PR Newswire. All rights reserved

Jim Rogers: Government Bailout a Huge Mistake

Going back to the time of former Fed Chair Arthur Burns, Jim Rogers said the idea he had that nothing should be allowed to fail is rearing its head again in the current economic climate in Washington.

Further, Rogers called the bailout plan by Treasury Secretary Henry Paulson "astonishing, devastating, and very harmful for America."

Newt Gingrich concurred saying, "I think you have a Goldman Sachs chief of staff to the President and the Goldman Sachs secretary of the Treasury, and they convinced the President that the American people ought to send $700 billion to Wall Street.

"I think it's a very, very bad idea, and I would argue a very un-Republican idea. I don't understand what they think they're doing."

Rogers added that it's "embarrassing" to watch the scenario unfold, as it reveals how little not only the Bush administration misunderstands economics, but both presidential candidates as well.

As far as Rogers' investments, he's been moving money back into Chinese stocks.

Wednesday, September 17, 2008

Jim Rogers: People Don't Understand Commodities

In a recent talk by Jim Rogers while attending the introduction of the Birla Sun Life Commodity Equities Fund, he said that people at this time, overall, have no understanding of commodities.

He said concerning the current phase commodities are in: "Bull markets happen when people begin to understand about a particular asset class. That’s what is going to drive a long bull phase in commodities. Out of the thousands of mutual funds in US, only a few hundred invest in commodities. That is going to change.”

Rogers added that commodities are in a similar phase stocks were about 30 years ago, and said it's being spurred by supply and demand. "Supply down... demand going up? That’s what I call a bull market.”

Rogers is particularly bullish on agriculture within the overall commodity field. He also has a stake in Swiss francs, the Japanese yen, and the Chinese yuan.

While they are not being look upon as investment options at this time, Rogers is also bullish on coffee, sugar, cotton, zinc and silver over the long haul.

Rogers also encouraged the Indian crowd that if they wanted to become rich they should take up farming. He wasn't kidding.

Commodities Back in Favor as Investors Flee to Safety

Commodities are enjoying a strong surge again, as the U.S. dollar fell, financial institutions waver, and investors flee equities looking for a safe haven.

Gold was the major recipient of the commodity surge, as it exploded by over $60 an ounce to end at $850.50 an ounce on the NYMEX during regular trading, and already going as high as $870.90 an ounce in after hours trading.

Silver also enjoyed a resurgence, as it had its biggest one-day increase in price since December 31, 1979, growing by $1.158 an ounce to settle at $11.675.

Oil also partook in the commodity uptick, as October delivery for light sweet crude in New York surged by $6.01 dollars to finish the session at $97.16.

A key factor in the overall strength in commodities today was the decline of the U.S. dollar, which dropped against most major currencies today, with the dollar index falling to 78.159, from the 79.149 it was at on late Tuesday.

Commodities are denominated in U.S. dollars, one of the reasons its weakness spurred part of the commodity rally.

A number of grains, including corn, soybeans and wheat also enjoyed solid growth today, as corn gained 22 cents a bushel to close at $5.54 on the CBOT, while soybeans jumped by 26 cents to $11.39 a bushel.

Even with high global wheat inventories putting downward pressure on the grain, the numerous factors putting commodities back in favor were enough to push wheat upward again, as it ended at $7.25-3/4 a bushel, up 35-3/4 cents, a 5.18 percent upward move.

Friday, September 12, 2008

U.S. Dollar: Up, Up and away... - will it last?

After about six years of faltering, the U.S. dollar has enjoyed a resurgence lately, as it's been on a significant upward run.

According to the New York dollar index, against the currencies of major trading partners the greenback has risen by 14 percent since the Bear Stearns fiasco.

More significant is the strength it has experienced against the euro, where it has climbed by 13 percent since hitting a $1.60 bottom a couple months ago.

Much of the upswing has come from investors moving their money to safer U.S. Treasury's, from stocks, bonds and real estate.

Some think there will be inevitable correction for the U.S. dollar soon, which could be precipitated by a jump in the price of oil or better news from emerging markets.

Even so, expectations are that Europe will probably cut rates some time in the next several months, and that should keep the U.S. dollar in a strong position in the near term.

From "Watching U.S. Dollar"

Wednesday, September 3, 2008

Commodity Giant "Ospraie Management" Shuts Down Largest Hedge Fund on Falling Prices

Poor decisions on the way prices for oil and natural gas were going, among others, has ended with the closing of the largest hedge fund run by giant Ospraie Management. The fund held up to $3.8 billion in assets at its height.

Industry analysts say that this could be just the beginning of a big correction by funds and investors heavily into commodities.

This is also more bad news for Lehman Brothers (LEH), which had a 20 percent stake in Ospraie.

Reflecting the falling value of commodities, Baltic Dry index, which measures costs in relationship to shipping dry bulk commodities like iron ore, fell by 4.95 percent to 6,146. That's the lowest it's been since February 2008.

The Reuters-Jefferies CRB index, which measures commodities prices globally, plunged to its lowest levels in sevn months as well, after agriculture and energy prices continue to fall.