Sunday, December 28, 2008

Commodities: Riots in the Streets of America

Bob Moriarty in an explosive interview on what he sees in the not-too-distant future for America, and how people can prepare for the unsettling times.

The Gold Report: Bob, what do you think of the Fed’s latest move—cutting to a flexible zero to a quarter rate? Where do you see us going?

Bob Moriarty: We are to the point where we are about 14 feet from going over the edge of Niagara Falls. We haven’t gone over the edge yet; we haven’t gone to a total collapse. We don’t have riots in the streets; we don’t have a revolution. That’s coming; that’s about two to three months off.

Here’s what we’ve got: the Fed has committed to $8.5 trillion of taxpayers’ money to bail out the worst run companies and banks. It hasn’t worked. Now, they’re at a 0% to .25% on the Fed Funds rate for funds for banks, which means if you go down and you pay $100,000 for a T-bill for 90 days, your return is zero, which is to imply that there is zero risk to investing with the government. Anybody who actually believes that is going to be in for a real shock in the first quarter of next year.

GM has lost has lost $80 billion dollars in the last four years. They’re burning through $2 billion a month when everything is going well. Their sales are down 37% in November; the mathematical probability of GM surviving is zero. But we’re going to pour more taxpayer money down that hole. AIG's also turned into the proverbial black hole. I would think that at $300 billion or $400 billion or $500 billion or $600 billion, somebody’s going to wake up and say, “You know, we’re losing a lot of money here.”

TGR: It’s getting to be real money at that point.

BM: What we have done is guaranteed hyperinflation in the United States. We have guaranteed the destruction of the United States. We will have riots starting in the first quarter of next year; we will default by the summer of 2009.

TGR: Default on how many of the bonds? All? Or just some?

BM: 100%. The US government is going to default. Treasuries, Fannie Mae, Freddie Mac, the whole lot. It’s the end of empire. The United States government will not exist in its current form a year from now.

TGR: When you say “its current form,” what form will it take?

BM: I don’t know. It’s a really good question. I’m sure it will be a total state of chaos. I mean we’ve never been here. I think the analogy of the Soviet Union is probably the closest; we could break up into a series of little fiefdoms. But here’s what’s important to understand—the United States government has failed at every single level. It is too big; it is too unwieldy; it doesn’t work.

TGR: So, what does it mean? We’ve got impending chaos in the United States—and the financial markets will continue to go downward. Are we talking globally or U.S.?

BM: U.S. primarily, but globally because the U.S. is so important. The U.S. is the linchpin right now, but the rest of the world is going to have to learn to get by without the United States. What George Bush and Dick Cheney have done is essentially destroyed the United States; they have bankrupted the country. We are going to end up having our troops march out of Iraq to the nearest border because we can no longer afford to pay for them. We’re going to go into Zimbabwe-type inflation where they’re printing off $200 million dollar bills to buy a loaf of bread.

TGR: Other than moving to a nice island in the Caribbean, what does an investor or a resident of the U.S. do?

BM: You have to prepare; first of all, it’s important to prepare mentally and that means doing some education. Second, you don’t want to be in debt. You don’t want to be buying real estate. You don’t want to be taking any chances financially whatsoever. You want to be investing in real resources: good solid producing gold companies or silver companies or energy companies. You want to really hunker down.

TGR: If the financial markets continue to get clobbered, I would assume the gold equity stocks would continue to get clobbered?

BM: I don’t think they will. Here’s what is going to happen. There is actually a lot of money sitting on the sidelines. I’ve heard there's billions of dollars waiting to be invested in resource stocks. Resource stocks are selling for 5 cents or 10 cents on the dollar; that’s not going to last for very long.

What I want to get across to everybody is and it’s very important, is that when you go through chaos, the worse it gets, the more inclined you are to solve it. There are some easy solutions to this financial situation in the United States.

First of all, we downsize; we stop spending all this money at the federal level; we stop spending money at the state level. We end up with a much smaller government that isn’t trying to make every decision for every person all the time. Big government doesn’t work any more. We need to change that. We need to go back to self-sufficiency; we need to go back to citizens participating in government.

We need to go back to Economics 101 where you invest to make money, save money. The gold companies that have the business model of print shares and drill, print shares and drill—those guys aren’t going to succeed. But the guys who have producing assets and real stories, they’re going to succeed beyond their wildest imagination.

We need to kill the Federal Reserve System and go back to honest money. That’s 90% of our problem right now. We are all playing at investing with Monopoly money backed by nothing. It’s about as smart as you sitting down at a high stakes poker game, you have a wad of $20 gold pieces and everyone else is playing with their Mobil Oil credit card. Those fools will bet on anything, it’s not real money.

TGR: Can they perform in a falling financial market?

BM: Of course.

TGR: Assuming gold is rising.

TGR: Do you see think a lot of these juniors have bottomed? A lot of the producers have doubled off of bottoms.

BM: Yes, they have actually—they bottomed in October. If you go back to what I was saying back then, I said we were at a bottom. They had definitely bottomed. The HUI has doubled since then and no one noticed.

The general stock market is going to be good until maybe January or February. But it’s going to get far worse after that. We have some real problems that will be surfacing between now and then. But there’s an enormous amount of money sitting on the sidelines waiting to go somewhere safe. When people realize that resource stocks are the only safe haven, they’re going to go up more than anybody can imagine.

So, there are two things I would do with new money. First of all, gold and silver serve as an insurance policy against chaos. If you cannot put your hands on some physical gold, physical silver, it’s like living without an insurance policy. When you need food, if you don’t have gold or silver, you’re going to be a bit shocked. Second of all as far as an investment program, beyond the insurance policy, you want to be in real assets. That’s gold or silver or energy producers or near-term producers, or companies with a good business model.

TGR: Any names you could share with us?

BM: Look at the recent Haywood Securities report, "Junior Mining: Report on Cash Sustainability." Now, 96 companies currently traded at discount to their last reported net working capital. This is the greatest opportunity to invest that I have ever read or heard about; it’s absolutely unimaginable. It’s not going to last very much longer, but stocks could move up. The really bad gold stocks are going to move up 500%.

TGR: You mentioned that you looked at gold and silver as an insurance policy and recommend investing in real assets. Do you have a recommendation of a percentage of the portfolio that people should be holding in these? How much cash should they keep for future opportunities?

BM: Ah, very little. Cash is going to be the most dangerous thing you can invest in. Cash, T-bills, T-bonds are going away; they’re going to be worth zero. You’re going to walk into a bank one day and your ATM machine is not going to work, and your cash is going to be no good. I would think two to three months' living expenses, if you can do that in cash or silver, would be a very high comfort level. That percentage will change depending on what people have. Everybody—I really want to emphasize that—everybody needs to have some physical gold or silver.

TGR: Bob, you don’t see that we’re going to get this hyperinflation kicking in or it’s going to be so short, it won’t matter?

BM: Hyperinflation is starting to kick in now. I think you’re going to see it turn shortly. The government has been flooding the system with money and in short order it’s going to try to find a safe haven. Here’s what to look for. If you take a look at a chart right now, the 10-year, 30-year bonds have gone curve linear. They’re going straight up to the moon. Any time a market does that, it’s about to crash. When the bond market crashes, it’s going to be 15 on the Richter scale. It’s going to be enormous. It’s far more dangerous than the stock market crashing. When the bond market crashes, the hyperinflation starts.

TGR: And what’s your timeline on that? You were saying before, January or February?

BM: The bond market is literally going to start crashing any day now. I mean it’s very, very soon. I think that the stock market is good through January or February. I think the resource market will start up in an explosive way literally in a few weeks or so. It’s actually going up now. If you go back the last month or six weeks, it’s gone up a lot more than anybody would believe. Everybody thinks, “Well, my gold stocks are all down, I’m going to lose money hand over fist.” But they’re actually 50% better off now than they were in October.

TGR: Bob, earlier you mentioned investing in real assets. You said gold and silver and energy producers. That’s a pretty broad-based statement; could you give us an idea of what you mean when you say energy producers?

BM: Coal producers, oil producers, natural gas producers—energy is absurdly cheap now; it was absurdly expensive at $147. You can buy energy producers really cheaply, and I have written up a number of them on I like anything real, anything that’s based on Economics 101. We’re going to take something of value and we’re going to increase its value, and we’re going to sell it to the public for a profit. That’s just a really good business model.

Here’s what I want to emphasize, and what’s important to get across—I don’t want to sound like I’m totally negative because I’m not totally negative. The worse it gets in the United States, the more impetus there will be to say, “Hey, what caused this in the first place? And what can we do to prevent it in the future?” And the answer to that is quite simple. We got off the gold standard in 1933 and in 1971, and that let government grow totally out of control. We need to rein government in; we need to go back to government of the people, by the people, and for the people. The way to do that is to go back to a gold and silver based currency. Once we do that we can start investing with some kind of common sense.

TGR: So the good news is that through all this chaos there will be some change in the way the government operates?

BM: Government will be much smaller; I think that any rational American can look at big government and say, “Hey, wait a minute. This doesn’t work.” And the funny thing is it’s not because I’m a liberal or I’m a conservative. I’m not sure there is any such thing as a perfect liberal or a perfect conservative, even though we act like they’re two totally different things. Big government doesn’t work; we need to go back to Economics 101 and only spend the money that you earn.

TGR: OK, other than getting mentally ready, getting into gold and silver and real assets, do you have any other thoughts on where to put our cash if we have any cash right now? What about other commodities, such as food commodities?

BM: Absolutely. I believe in peak oil, and peak oil is an analog of peak food. So, it requires X number of calories of energy to produce X number of calories of food, so when you run out of cheap energy, you run out of cheap food. Americans are going to be very angry. We have a very dangerous system in the United States where we essentially have a day and a half’s worth of food in our food stores. It’s a just in time now system. And it’s very vulnerable to civil disorders.

TGR: Is there an investment play within the food component?

BM: I think anything in food. Strangely enough, what I like is fertilizers. Fertilizers are a real cheap way of betting on food. Some of the big food companies, like R Gill, are just as corrupt as everybody in Washington, everybody in Wall Street, so I can’t recommend them. I don’t know that big food stocks are good, but maybe equipment manufacturers would be a good bet.

TGR: Bob, do you think there’s any gold in Fort Knox?

BM: That’s a really good question. I hope there is. But I don’t know. The really interesting thing is nobody in the government has ever even pretended that they might do something with it. If it was me, I’d go count the bars; I’d figure out who owns them and I’d come up with some kind of currency tied to gold, you know—1 gram notes, and 5 gram notes and 10 gram notes. I think mathematically there probably isn’t, but I don’t know. Nobody knows.

TGR: And there’s no accountability?

BM: Ah, are you kidding? George Bush is president of the United States.

TGR: Yes, but soon he won’t be. You know, I’ll write a letter to Obama and ask him. Well, Bob, as usual, it’s always great to do these interviews. We appreciate it.

Bob Moriarty and his wife, Barb, launched as a private website seven years ago, when they were convinced gold and silver were at a bottom and wanted to help others understand what they needed to know about investing in resource stocks. Since then, they’ve introduced a second resource site, Bob travels to dozens of mining projects a year. He was one of the first analysts to write about NovaGold, Northern Dynasty, Silver Standard, Running Fox and YGC Resources, among others. Prior to his Internet career, Bob was a Marine F-4B pilot at the age of 20 and a veteran of over 820 missions in Viet Nam. Becoming a Captain in the Marines at 22, he was one of the most highly decorated pilots in the war.

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Friday, December 26, 2008

DJ US Export Sales: Commodity Highlights - Dec 26

Kansas City, Dec 26, 2008 (Dow Jones Commodities News via Comtex) -- USDA Thursday released the following export highlights in its Export Sales report for week ended Dec 18.

Wheat: Net sales of 253,600 metric tons were down 3 percent from the previous week and 12 percent from the prior 4-week average. Increases reported for Mexico (58,600 MT), Egypt (57,800 MT), Taiwan (56,000 MT), Japan (53,700 MT), Guatemala (30,900 MT, including 30,200 MT switched from unknown destinations), Yemen (28,000 MT), and South Korea (23,800 MT), were partially offset by decreases for unknown destinations (50,800 MT) and Spain (40,000 MT). Exports of 290,900 MT--a marketing-year low--were down 30 percent from the previous week and 34 percent from the prior 4-week average. The primary destinations were Mexico (96,900 MT), Egypt (57,800 MT), Japan (46,500 MT), Guatemala (30,900 MT), Morocco (19,600 MT), and Colombia (15,400 MT).

Corn: Net sales of 551,400 MT were down 10 percent from the previous week and 6 percent from the prior 4-week average. Increases reported for Japan (263,900 MT), Taiwan (90,500 MT, including 79,000 MT switched from unknown destinations), Mexico (81,000 MT), Venezuela (80,000 MT), Guatemala (22,400 MT), and Syria (18,000 MT), were partially offset by decreases for South Korea (24,600 MT), Egypt (16,300 MT), unknown destinations (12,000 MT), and Colombia (5,800 MT). Exports of 831,300 MT were up 17 percent from the previous week and 7 percent from the prior 4-week average. The primary destinations were Japan (289,200 MT), Mexico (119,000 MT), Taiwan (117,200 MT), South Korea (114,300 MT), Colombia (69,100 MT), Canada (28,900 MT), and Egypt (24,100 MT).

Barley: There were no sales reported during the week. Exports of 5,600 MT were for Japan (4,900 MT) and Mexico (700 MT).

Sorghum: Net sales of 88,900 MT were for Mexico. Exports of 12,800 MT were for Mexico (12,700 MT) and Canada (100 MT).

Rice: Net sales of 23,300 MT were down 77 percent from the previous week and 71 percent from the prior 4-week average. Increases were reported for Venezuela (20,000 MT), Mexico (1,400 MT), Canada (1,200 MT), Jordan (600 MT), and the Bahamas (200 MT). Decreases were for Japan (600 MT). Exports of 61,800 MT were down 34 percent from the previous week and 5 percent from the prior 4-week average. The primary destinations were Costa Rica (33,000 MT), Mexico (16,500 MT), Canada (2,600 MT), Honduras (2,500 MT), South Korea (2,000 MT), Jordan (1,900 MT), and New Guinea (1,400 MT).

Soybeans: Net sales of 584,800 MT were down 35 percent from the previous week and 18 percent from the prior 4-week average. Increases reported for China (374,400 MT, including 167,000 MT switched from unknown destinations), the Netherlands (129,800 MT, including 120,000 MT switched from unknown destinations), Indonesia (114,500 MT), Egypt (60,000 MT), and Taiwan (59,600 MT, including 56,000 MT switched from China), were partially offset by decreases for unknown destinations (232,000 MT) and Morocco (23,800 MT). Net sales of 6,100 MT for 2009/10 delivery were for Japan. Exports of 951,500 MT were down 18 percent from the previous week and 13 percent from the prior 4-week average. The primary destinations were China (609,200 MT), the Netherlands (129,800 MT), Japan (57,000 MT), Mexico (39,900 MT), Morocco (31,200 MT), Israel (23,300 MT), and Taiwan (23,000 MT).

Soybean Cake and Meal: Net sales of 145,700 MT were up two and three-tenths times from the previous week and nearly two and two-fifths times from the prior 4-week average. Increases were reported for Mexico (33,300 MT), Venezuela (23,000 MT), Turkey (16,700 MT, including 15,000 MT switched from unknown destinations), Canada (16,200 MT), the Dominican Republic (15,700 MT), and Guatemala (11,900 MT). Exports of 229,700 MT were up 77 percent from the previous week and 44 percent from the prior 4-week average. The primary destinations were Venezuela (56,200 MT), Mexico (43,600 MT), Ecuador (27,400 MT), Canada (23,300 MT), Turkey (16,700 MT), and the Dominican Republic (16,300 MT).

Soybean Oil: Net sales of 5,400 MT were mainly for Canada (2,200 MT), Mexico (2,000 MT), Nicaragua (600 MT), the Dominican Republic (300 MT), and Guatemala (200 MT). Decreases were for Saudi Arabia (100 MT). Exports of 7,400 MT were up 23 percent from the previous week, but down 43 percent from the prior 4-week average. The destinations were primarily Mexico (2,600 MT), Costa Rica (1,500 MT), El Salvador (800 MT), Canada (700 MT), Barbados (700 MT), and Nicaragua (600 MT).

Cotton: Net Upland sales of 118,900 running bales were up 52 percent from the previous week and 7 percent from the prior 4-week average. Increases reported for Turkey (26,700 RB), Morocco (17,100 RB), Indonesia (16,400 RB), China (13,700 RB), Bangladesh (10,200 RB), and Malaysia (9,700 RB), were partially offset by decreases for Pakistan (7,700 RB), El Salvador (1,900 RB), and unknown destinations (1,800 RB). Net sales of 1,000 RB for delivery in 2009/10 were for South Korea. Exports of 210,700 RB were up 18 percent from the previous week, but down 1 percent from the prior 4-week average. The primary destinations were China (54,600 RB), Turkey (47,700 RB), Vietnam (29,500 RB), Mexico (12,600 RB), and Thailand (10,400 RB). Net American Pima Sales of 100 RB resulted as increases for Indonesia (600 RB), Thailand (400 RB), and Japan (400 RB), were partially offset by decreases for China (1,300 RB). Exports of 400 RB were for India.

Hides and Skins: Net sales of 689,400 pieces were up 7 percent from the previous week and 24 percent from the prior 4-week average. Whole cattle hide sales of 719,500 pieces were primarily for China (352,900 pieces), South Korea (142,700 pieces), Taiwan (118,700 pieces), Mexico (30,300 pieces), and Japan (25,500 pieces). Exports of 455,700 pieces were up 12 percent from the previous week and 14 percent from the prior 4-week average. Whole cattle hide exports of 443,400 pieces were primarily to China (224,300 pieces), South Korea (77,900 pieces), Thailand (39,500 pieces), Taiwan (34,800 pieces), and Mexico (27,100 pieces).

Net sales of 81,100 wet blues were down 9 percent from the previous week and 46 percent from the prior 4-week average. Increases were mainly for Thailand (52,300 unsplit), Taiwan (28,400 unsplit), China (4,800 unsplit), Mexico (2,400 grain splits), and Hong Kong (1,800 unsplit). Exports of 78,800 hides were up 3 percent from the previous week and 17 percent from the prior 4-week average. The primary destinations were China (35,600 unsplit), Hong Kong (16,600 unsplit), Italy (14,700 unsplit), and Mexico (4,900 grain splits). Net sales of splits totaling 419,200 pounds were primarily for China (405,000 pounds). Exports of 128,200 pounds were down 63 percent from the previous week and 65 percent from the prior 4-week average. The destination was China.

Beef: Net sales reductions of 6,200 MT resulted as increases for Mexico (1,900 MT), Canada (800 MT), and the Philippines (100 MT), were more than offset by decreases for South Korea (7,100 MT), Vietnam (900 MT), Japan (600 MT), and Russia (400 MT). Net Sales of 13,000 MT for delivery in 2009 were primarily for South Korea (6,400 MT, switched from marketing year 2008), Vietnam (2,400 MT, including 900 MT switched from marketing year 2008), Mexico (2,400 MT), and Japan (1,100 MT, including 400 MT switched from marketing year 2008). Exports of 8,200 MT were primarily to Mexico (3,900 MT), Canada (1,500 MT), Japan (800 MT), South Korea (600 MT), and Taiwan (400 MT).

December 26, 2008

Reported Under the Daily Reporting System
For Period Ending December 18, 2008
Commodity Destination Quantity (MT) Marketing
SOYBEANS 1/ CHINA 116,000 2008/09

1/ Export sales.

-By Valena Henderson; Dow Jones Newswires; 913-322-5171;

Dow Jones Newswires
12-26-08 0832ET
Copyright (c) 2008 Dow Jones & Company, Inc.

Tuesday, December 23, 2008

Victim of Madoff Scandal "Thierry Magon de La Villehuchet" Found Dead

The latest victim of the huge Bernard Madoff scandal is French executive Thierry Magon de La Villehuchet, who was found dead in his Manhatten office today by police. He died of an apparent suicide, and was pronounced dead at 8 a.m EST.

De la Villehuchet, who was 65, co-founded Access International Advisors, which had invested $1.4 billion with Madoff. De la Villehuchet was also the CEO of the company, and was attempting to recoup some of the losses inflicted by Madoff on behalf of his investors.

Bernard Madoff, who ran the Ponzi scheme that may have resulted in losses of up to $50 billion, is now under house arrest at his New York apartment.

Ron Paul Explains Origins and Disaster of Government Bailouts

Monday, December 22, 2008

JP Morgan Acquires Part of UBS' Commodity Business

In October UBS let it be known they were looking for suitors for much of their commodities business, as they wanted to focus primarily on their advisory and securities businesses.

They have started that process as they sold their global agriculture business, along with its Canadian energy operations to J.P. Morgan Chase (JPM).

"We continue to take advantage of opportunities that will further enhance and diversify our global commodities business," said Blythe Masters, head of global commodities for J.P. Morgan. "The addition of these businesses and talented teams further expands our North American energy franchise and provides further depth to our growing agricultural and soft commodities platform."

The Canadian energy side of things was secured through J.P. Morgan acquiring shares in UBS Warburg Energy Holdings, according to a statement from UBS.

The global agricultural business acquired was the "Global Agricultural Commodities" business of UBS based in London.

According to the companies, the deal is projected to close in the first quarter 2009.

UBS plans on keeping the commodities businesses related to precious metals, as well as index and exchange-traded business.

They are pursuing discussions related to all other parts of its commodities businesses not yet sold.

Friday, December 19, 2008

Jim Rogers Giving Clinic on Identifying and Solving Economic Crisis Part 5 of 5

Points covered in video:

Why Rogers moved to Singapore

Saw housing problems coming

Saw finanical problems coming

Wanted children to grow up in Asia

Future is Asia

Part One Part Two Part Three Part Four Part Five

Jim Rogers Giving Clinic on Identifying and Solving Economic Crisis Part 4 of 5

Points covered in video:

Obama plans on taxing capital, which will be a disaster

Obama also plans on more protectionism, which will also be a major disaster for the American and global economies

Historically power follows the money, money is flowing to Asia

People also follow the opportunities capital provides

Talks on living in Singapore

Part One Part Two Part Three Part Four Part Five

Jim Rogers Giving Clinic on Identifying and Solving Economic Crisis Part 3 of 5

Points covered in video:

Where the opportunities are now

In forced liquidation period

Find things where fundamentals are unimpaired

What is unimpaired are raw materials, commodities

Supplies of everything will continue to decline

Categories like farming, mining and lumber will be significant going ahead

Farming has severe shortages now

Even though demand is going down, supply is going down faster

Historically commodities tend to come back first in tough times because of shortages of everything

Alternative energy a long way from being reality or affordable

Future of China and America over next 30 years

Part One Part Two Part Three Part Four Part Five

Jim Rogers Giving Clinic on Identifying and Solving Economic Crisis Part 2 of 5

Points covered in video:

Paulson and Bernanke either incompetent or lying

Wrong every time they open their mouths

Washington a place where they aren't accountable for being right or wrong

People not credit worthy in many cases bought several houses with no money down

Banks started doing the same with car loans, credit cards and student loans

With those excesses, something will have to give and get cleaned up, government won't allow the cleanup

Don't need more regulations, have enough

Regulated companies causing problem

Alan Greenspan has said derivatives are good

If Greenspan had let people fail in the 1990s, we wouldn't be going through problems we are today

Incompetent would have been gone

He wouldn't let them fail then, as they're not letting them fail today

So incompetent will remain

Refused to let free market work and intervened by not allowing them to fail

Greenspan was vastly overrated - part of the problem

Bernanke doesn't understand markets or finance

People must be held accountable by allowing them to fail

Have to be allowed to learn from mistakes, not be propped up in spite of them

Part One Part Two Part Three Part Four Part Five

Commodities: Economic Crisis Part 1 of 5

Points covered in video:


Not good for America or world

Bailing out those making bad decisions

Incompetent people should be allowed to fail

Competent people or businesses can start over from strong base ... system grows again

Bailouts are taking assets from the competent and giving them to the incompetent

Entire system is weakened as a result

Incompetent keep bonuses because taxpayers are paying the bill

America as we know it will not exist any more

People responsible haven't even lost their jobs

Previous round of people that did lose their jobs walked away with millions

Money has shifted to Asian economies

Obama has no answer but wants to spend even more

It took 200 years to build a $5 trillion debt in America, in less than a year it stands at least at $15 trillion

Must allow incompetent to fail

Someone has to pay for the last 10 years of excess

18 years after Japan refused to let anyone fail, it still hasn't recovered near to levels at that time

Amazingly, Alan Greenspan went to Japan about 18 years ago and told them they needed to let things fail. He forgot his own correct advice

America now doing the same thing as Japan

Alan Greenspan main culprit of current economic crisis

Should be very worried about future of America

Part One Part Two Part Three Part Four Part Five

Thursday, December 18, 2008

Saturday, December 13, 2008

Commodities: World Agricultural Supply + Demand

Commodity Grain Stocks Rise Significantly in 2008 - 2009

World Agricultural Supplyand Demand EstimatesUnited States Department of AgricultureAgricultural Marketing Service Economic Research ServiceFarm Service Agency Foreign Agricultural ServiceWASDE-465 Approved by the World Agricultural Outlook Board December 11, 2008


Projected U.S. wheat ending stocks for 2008/09 are raised 20 million bushels this month onhigher imports and lower food use. Wheat imports are projected 10 million bushels higher as abundant foreign supplies of feed quality wheat and extremely low ocean freight rates provide incentives toimport wheat for domestic feeding. Wheat food use is projected 10 million bushels lower based on thelatest mill-grind data from the U.S. Bureau of Census. High flour extraction rates are limiting year-toyear growth in wheat-milling use. By-class changes to imports and exports are also made this month reflecting the pace of shipments to date. The all-wheat season-average farm price is projected 15cents lower on both ends of the range to $6.40 to $7.00 per bushel. Global 2008/09 wheat production is projected at 684.0 million tons, up 1.6 million from last month. Increases for Canada, Brazil, EU-27, and Serbia more than offset a reduction for Argentina. Production for Canada is raised 1.3 million tons in line with the latest estimates from Statistics Canada. Brazil production is raised 0.4 million tons based on recent government estimates that indicate higher production despite excessive rains during harvest.

Production is raised 0.3 million tons for EU-27 with an increase for the United Kingdom which also experienced heavy harvest time rains that raised uncertainty about final yields. Production is raised 0.1 million tons for Serbia. Production for Argentina is cut 0.5 million tons asharvest results indicate substantial yield variability and reductions caused by extended dryness overthe past few months. World wheat imports and exports for 2008/09 are both lowered slightly this month. Imports are lowered as the increase in U.S. imports is more than offset by 0.2- million- ton reductions for both Malaysia and Vietnam. Exports are lowered as a 0.5-million-ton increase for Canada is more than offset by 0.5 million ton reductions for both Argentina and Australia. Exports are also lowered 0.1 million tons for Malaysia as reduced imports lower flour export prospects. World wheat consumption for 2008/09 is lowered this month mostly reflecting the reduction in U.S.wheat food use. Global wheat feeding is increased 0.3 million tons with increases for Australia and Brazil. Untimely harvest rains in eastern Australia and Brazil have reduced wheat quality in bothcountries. Partly offsetting is a reduction in expected wheat feed use in Vietnam with reduced imports.Global ending stocks are raised 2.1 million tons this month.

Nearly two-thirds of the increase is in North America with Canada and U.S. stocks projected 0.8 million tons and 0.5 million tons higher,respectively.


Projected U.S. feed grain ending stocks for 2008/09 are raised this month withincreases for corn, barley, and oats. Corn use is projected lower with increased feed and residual usemore than offset by reductions in ethanol use and exports. Ethanol use is projected 300 million bushels lower this month as prospects for blending above federally mandated levels decline. Financialproblems for ethanol producers are reducing plant capacity utilization for existing plants and delaying plant openings for those facilities still under construction. Falling gasoline prices have also resulted in high relative prices for ethanol, reducing blender incentives. Despite reductions in expected meatproduction, corn feed and residual use is raised 50 million bushels as lower ethanol production reduces the availability of distillers grains. Corn exports are projected 100 million bushels lower reflecting strong competition from larger foreign grain supplies and the slow pace of sales to date. Projected ending stocks are raised 350 million bushels. The season-average farm price is projected at $3.65 to$4.35 per bushel, down on both ends of the range from last month’s $4.00 to $4.80 per bushel.Other U.S. feed grain changes this month reflect reduced prospects for exports and increased prospects for imports that are only partly offset by increased domestic use. Sorghum exports arereduced 10 million bushels based on the slow pace of sales and shipments. Sorghum feeding is raised an offsetting 10 million bushels. Barley imports are raised 5 million bushels and exports reduced 5 million bushels, adding 10 million bushels to ending stocks. Oats imports are raised 5 million bushels increasing projected ending stocks the same amount. The sorghum farm price is projected lower at$3.00 to $3.60 per bushel compared with $3.40 to $4.20 per bushel last month. The projected rangefor the oats farm price is narrowed 10 cents on both ends to $2.80 to $3.00 per bushel. The barley farm price range is raised 15 cents on each end of the range to $4.85 to $5.45 per bushel. The allbarley farm price continues to be supported by high pre-planting contract prices for 2008 malting barley. Global coarse grain supples for 2008/09 are projected 7.3 million tons higher this month with beginning stocks raised 1.6 million tons and production raised 5.7 million tons. Beginning stocks are increased partly reflecting upward revisions to 2007/08 production for Australia and Brazil sorghum and South Africa corn. Increased 2008/09 global coarse grain output is driven by higher projected corn production for China, EU-27, Canada, and Ukraine; higher projected barley production for Canada; and higher sorghum production for countries of Sub-Saharan Africa. China corn production is raised 4 million tons based on early provincial reports. EU-27 corn production is raised 1.4 million tons based on the latest reported data. Canada corn production is raised 0.7 million tons and barley production is raised 0.6 million tons based on the latest Statistics Canada estimates. Ukraine corn production is raised 0.5 million tons in line with yield indications from the final stages of harvesting. Partly offsetting is a reduction of 1.5 million tons for Brazil corn output on early season dryness for the first crop and lower expected area for the second crop. Corn production is also lowered 1.0 million tons for South Africa reflecting reduced area as indicated by planting intentions. Oats production for Australia is lowered 0.2 million tons based on the latest government estimate.World coarse grain imports and exports for 2008/09 are both lowered this month. Global exports are projected 2.3 million tons lower mostly reflecting this month’s reduction in U.S. corn exports. India corn exports are also reduced 0.5 million tons. Partly offsetting are increases for Brazil, Serbia, Canada, and Russia. Global coarse grain feeding is projected up 0.3 million tons as the 1.2-million-ton increase in U.S. corn is mostly offset by reductions in a number of countries. Global coarse grain consumption is projected 7.4 million tons lower mostly on lower expected U.S. ethanol corn use. Global coarse grain stocks for 2008/09 are projected at 165.5 million tons, up 14.6 million from last month, and the highest since 2004/05.


Projected U.S. rice beginning stocks and production for 2008/09 are unchanged from a month ago; however, imports are lowered 3 million cwt to 22.5 million. The reduction in the import projectionis due to a slower-than-expected pace of imports early in the marketing year from key suppliers including Thailand and India, and the expectation that the pace will remain depressed the remainder of the marketing year. Long-grain imports are lowered 2 million cwt, while combined medium- and shortgrain imports are lowered 1 million. Although all rice domestic and residual use is unchanged from a month ago, the by-class projections are changed slightly with long-grain raised 1 million cwt and offset by a reduction of 1 million for combined medium- and short-grain. All rice exports are lowered 1 million cwt to 106 million, all in long-grain. Rough rice exports are raised 1 million cwt to 39 million, while combined milled- and brown-exports (on a rough-equivalent basis) are lowered 2 million cwt to 67.0 million. All rice ending stocks are projected at 23.4 million cwt, 2 million cwt below last month, with the reduction all in long-grain. The all rice season-average farm price is forecast at $15.15 to $16.15 per cwt, up 65 cents per cwt on both ends of the range. The long-grain season-average farm price range is projected at $14.50 to $15.50 per cwt, up 65 cents per cwt on each end of the range. The combined medium- and short-grain farm price range is projected at $18.00 to $19.00 per cwt, up $1.00 per cwt on each end. Although global rice prices have trended downward since the beginning of the marketing year, they are declining at a slower-than-expected rate. Government policies in Thailand (intervention program) combined with continued export bans by India and Egypt are affecting global prices. Additionally, monthly farm prices reported by the National Agricultural Statistics Service through November (preliminary) indicate that the season-average price will be higher than projected a month ago, particularly for medium-grain rice. World 2008/09 rice supply and use are changed little from a month ago. Global production is raised slightly because of small increases for South Korea and Uruguay. World imports are raised due to increases for Iran, Iraq, and Venezuela, which are partially offset by a reduction for the United States. Global ending stocks for 2008/09 are projected at 80.8 million tons, up slightly from last month, and 2.3 million tons above 2007/08. Stocks are raised for Iran, Iraq, Venezuela, and Uruguay; and lowered for Australia and the United States.


U.S. oilseed production for 2008/09 is projected at 88.2 million tons, up slightly due to increased cottonseed production. Soybean exports are raised 30 million bushels to 1.05 billion bushels reflecting strong early season shipments and sales, especially to China. Soybean crush is reduced 30million bushels to 1.715 billion, reflecting weak domestic soybean meal consumption and lower soybean meal export prospects, especially to Canada. Projected soybean ending stocks are unchanged at 205million bushels. Soybeans and soybean product prices for 2008/09 are projected lower this month. The U.S. season average soybean price range for 2008/09 is projected at $8.25 to $9.75, down $0.85 on both ends. The soybean meal price is projected at $240 to $300 per short ton, down $15 on both ends of the range. The soybean oil price range is projected at 31 to 35 cents per pound, down 6.5 cents on both ends. Global oilseed production for 2008/09 is projected at a record 418.3 million tons, up 0.4 million tons from last month. Foreign crops account for nearly all of the change with higher estimates for rapeseed and peanuts only partly offset by lower soybean, sunflowerseed, and cottonseed production estimates. Projected soybean production for India increased 0.5 million tons from last month to a record 9.7 million. The change reflects higher yields resulting from this year’s harvest. Paraguay soybean production is reduced 0.7 million tons to 6.5 million tons due to lower planted area. Brazil soybean production is reduced 1 million tons to 59 million due to lower projected area. The reduction reflects recent government surveys that indicate area is expected to be unchanged from 2007/08. Canada rapeseed production is raised 1.7 million tons to a record 12.6 million tons based on the latest survey results from Statistics Canada. Canada’s soybean crop is also increased this month based on the survey. Argentina sunflowerseed production was reduced this month as unusually dry weather prevented producers from meeting earlier expectations. Sunflowerseed production was also reduced for India. Other changes include reduced cottonseed production for Brazil and Uzbekistan, and higher peanut production for India. Global oilseed crush for 2007/08 is reduced 0.5 million tons this month to 348 million due mainly tolower soybean crush for Brazil, Argentina, and the United States. Partly offsetting are increases insoybean crush for India, higher rapeseed crush for Canada and China, and higher sunflowerseed crush for EU-27. Global trade changes include reduced soybean exports for Argentina, Brazil, and Paraguay; Higher rapeseed exports for Canada; and higher rapeseed imports for China.Global oilseed ending stocks for 2007/08 are raised 0.8 million tons to 65.4 million mainly reflecting higher rapeseed stocks in Canada.


Projected 2008/09 U.S. sugar supply is decreased 26,000 short tons, raw value, from last month, due to revised lower beginning stocks. Imports from Mexico are raised 80,000 tons and offsetby a reduction in imports under the re-export programs, while exports are lowered 80,000 tons to reflect the stronger U.S. dollar exchange rate relative to the Mexican peso. Ending stocks are raised 54,000 tons from last month to 961,000 tons, down 703,000 tons from 2007/08.For 2007/08, imports from Mexico are increased 159,000 tons to reflect additional information from U.S. Customs; and with the revision in ending stocks, the residual statistical discrepancy is lowered to -71,000 tons. For Mexico, estimated ending stocks for 2007/08 (Oct-Sep) are lowered 172,000 metric tons from last month mainly due to the increase in exports. Production and domestic use of sugar in Mexico for 2008/09 are unchanged from last month. With the changes in U.S.-Mexico trade, Mexico’s ending stocks for 2008/09 are lowered 322,000 tons to 1.03 million, down 355,000 tons from 2007/08.


Total U.S. meat production forecasts for 2008 and 2009 arereduced from last month. Forecasts for 2008 for all meats are lowered, reflecting a slowdown in outputduring the fourth quarter to date. The pork production forecast for 2009 is raised as lower feed costs result in slightly heavier weights, but this gain is more than offset by lower forecasts of beef and poultry. Cattle placements for the remainder of 2008 are expected to be lower which will result in reduced beef production in the first half of 2009. Poultry production is forecast lower as poor returns are expected to result in a continuation of production declines for the first part of 2009. Lower feed prices and higher broiler and turkey prices may stabilize production in the latter part of the year.Export forecasts for beef are little changed from last month, reflecting actual third-quarter data. Pork and broiler export forecasts are reduced for 2008 and 2009. Demand is expected to remain relatively weak due to economic uncertainty, and a stronger U.S. dollar may further dampen sales.Cattle, broiler, and turkey price forecasts for both 2008 and 2009 are lowered as demand is weaker than expected. Forecast hog prices are reduced slightly in 2008, but are unchanged for 2009 assupplies of competing meats are lowered. Egg prices are little changed. Milk production forecasts for 2008 and 2009 are reduced slightly from last month. The cow number forecasts are unchanged. Forecast milk per cow for both years is reduced reflecting the continued slowrate of growth in output per cow. Commercial export forecasts for 2008 are raised as export datapoints towards stronger-than-expected sales, especially on a fat basis. However, the forecasts for2009 are unchanged as weaker international demand is expected to limit exports. Fat basis imports for2008 are reduced due to weaker demand but skim-solids imports are adjusted to reflect higher-than expected third-quarter imports. Weakness in demand for fat basis imports is expected to carry into 2009, thus the fat basis import forecast for 2009 is lowered. Sales of nonfat dry milk (NDM) to the CCC are forecast for higher 2008 and 2009. The Class III price for 2008 is raised due to higher cheese prices, but the Class IV price forecast is lower due to lower butter and NDM price forecasts. Class III and Class IV prices for 2009 are reduced from last month as most product price forecasts are lowered. Demand both domestically and in international markets will likely be affected by economic weakness. Although relative product values may encourage milk to shift to cheese production, butter and NDM prices will be pressured by relatively weak demand for much of the year. Cheese prices are forecast weaker as domestic demand lags in a weak economy. Although the whey price is unchanged from last month, weaker cheese prices will push the Class III price lower while lower butter and NDM prices will result in a reduced Class IV price. The 2008 all milk price forecast is unchanged this month, averaging $18.30 to $18.40 per cwt, but the 2009 forecast is lowered to $14.95 to $15.75 per cwt.


The U.S. cotton estimates for 2008/09 show lower domestic mill use and exports compared with last month, resulting in higher ending stocks. Production is raised slightly. Domestic mill use is reduced 100,000 bales, reflecting a marginal decline from the level of recent months. Exports are reduced 750,000 bales, as sharply lower world consumption is anticipated to limit demand for U.S.cotton. Accordingly, ending stocks are raised nearly 15 percent from last month to 7.1 million bales.The forecast range of 41 to 51 cents per pound for the marketing year average farm price is 4 cents lower on both ends of the range. This month’s world cotton forecasts include lower production, consumption, and trade. World production is reduced 1.4 million bales from last month’s estimate, as lower production for India, Brazil, Egypt, and others is partially offset by an increase for Pakistan. World consumption is reduced sharply for the second consecutive month, as deteriorating economic conditions continue to fade demand prospects. Consumption is lowered 2.7 million bales to 116.6 million, with China, India, Pakistan, and Turkey accounting for most of the decrease. The revised world consumption estimate is 5.5 percent lower than 2007/08, which is the largest year-to-year percentage reduction since 1943/44. Consistent with lower world consumption, world trade is reduced 7 percent this month, due mainly to lower imports by China, Pakistan, and Turkey. India, the United States, and Uzbekistan account for most of the reduction in world exports. World stocks are raised 2.4 percent, but are still 2.6 million bales below the beginning level.

Approved by the Secretary of Agriculture and the Chairperson of the World Agricultural Outlook Board, Gerald A. Bange, (202) 720-6030. This report was prepared by the Interagency Commodity Estimates Committees.


Commodity grain stocks report

Friday, December 12, 2008

Former Nasdaq Chairman Bernard L. Madoff Arrested on $50B Fraud Charge

While the case against former Nasdaq chairman Bernard L. Madoff is still being put together, estimates are his huge fraud could cost investors a minimum of $50 billion. So far Madoff is facing one count of securities fraud, which he has confessed to.

Government officials say that his firm, Bernard L. Madoff Investment Securities LLC, was nothing more than a "ponzi scheme," citing Madoff himself as well as his employees who said Madoff told them "... It's all just one big lie" and "basically, a giant Ponzi scheme."

Employees said they took that to mean "he had for years been paying returns to certain investors out of the principal received from other, different, investors."

If the complaint and numbers are accurate, it would probably be the largest fraud perpetrated by an individual in history.

According to the SEC, they're pursuing appointment of a receiver for the company, and are also seeking an asset freeze to provide emergency relief for investors.

Calling Madoff ""a person of integrity," defense attorney Dan Horwitz says he plans on fighting the charges.

If Madoff is convicted of the charge, he could receive up to 20 years in jail, along with a $5 million fine.

Madoff was released Thursday evening on $10 million bail.

Related Stories:

Mad Madoff

Sons Turned In Madoff

Sterling Equities, Madoff Client, ‘Shocked’ by Fraud

Madoff fraud scandal chills Florida wealthy

Wall Street rocked by charges of massive fraud

UK asset manager Bramdean says exposed to Madoff

Ron Paul Educates on the Bailout Craze and America's Misguided Move Toward Nationalization

HOw would commodities fare under nationalization?

Ron Paul talks about the bailout addiction, and how that's moving our economy toward nationalization.

Practice has shown when nationalization is brought to bear on any industry, the result is always to diminish production, and create artificial shortages.

Commodities will suffer under the move toward nationalization of any part of the American economy.

Thursday, December 11, 2008

Commodities: Focus on Cause of Financial Bubbles

Financial bubbles have significant impact on commodity demand, prices and performance

Ron Paul talks on the causes of financial bubbles, and how we need to sever the root rather them simply focusing on the fruit of the problem.

The impact of financial bubbles on all the economy, including commodities, continues to be a major contributor to booms and busts in the American, and global economies.

Wednesday, December 10, 2008

The Rogers(TM)-Van Eck Hard Assets Producers Index Returned -49.1% Year-to-Date Through November 2008

NEW YORK, Dec 09, 2008 (BUSINESS WIRE) -- The Rogers(TM)-Van Eck Hard Assets Producers Index (Bloomberg ticker: RVEI), returned -4.6% in November 2008 and -49.1% year-to-date through end-November 2008.

RVEI was launched in June 2008 and is viewed by many as the definitive global benchmark for commodity equities. Jim Rogers, the well known international investor, is chairman of the RVE Index Committee, and was actively involved in the construction of the index in partnership with S-Network Global Indexes, LLC. Van Eck Global has endorsed the index.

RVEI is comprehensive in construction, covering 328 companies in 41 countries and 6 sectors as of end-November. The index includes the world's largest and most prominent publicly traded companies engaged in the production and distribution of hard assets and related products and services, and captures more than 90% of the industry's global stock market capitalization. The sectors covered include energy, agriculture, base metals, precious metals, forest products and water and renewable energy (solar and wind).

The index is pure-play in its focus, including only those companies that derive at least 50% of their revenues from the applicable commodity sector. The sole exception is water, where constituents must generate at least 25% of their revenues from that industry. At end-November, the top three holdings were Exxon Mobil Corp., Monsanto Co., and Chevron Corp., with weightings of 8.7%, 7.6% and 3.4%, respectively.
Market Vectors--RVE Hard Assets Producers ETF (ticker: HAP) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of RVEI. HAP generally holds all the securities that make up RVEI in proportion to their Index weightings.

*Past performance does not guarantee future results. RVEI's return does not represent the performance of any fund. RVEI charges no fees, including management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. Investors cannot invest directly in RVEI.

Performance information presented for RVEI covering the period prior to June 16, 2008 is based on hypothetical, back-tested data. Prior to June 16, 2008, RVEI was not calculated in real time by an independent calculation agent. Hypothetical, back-tested performance has inherent limitations and is not indicative of future results. No representation is being made that any investment will achieve performance similar to that shown.

About Jim Rogers

Jim Rogers is the well-known international investor, financial author and commentator. He was a co-founder of the Quantum Fund and served as a professor of finance at the Columbia University School of Business.

"Jim Rogers," "James Beeland Rogers, Jr.," and "Rogers," are trademarks, service marks and/or registered trademarks of Beeland Interests, Inc. ("Beeland Interests"), which is owned and controlled by James Beeland Rogers, Jr., and are used subject to license. The personal names and likeness of Jim Rogers/James Beeland Rogers, Jr. are owned and licensed by James Beeland Rogers, Jr.

HAP is not sponsored, endorsed, sold or promoted by Beeland Interests or James Beeland Rogers, Jr. Neither Beeland Interests nor James Beeland Rogers, Jr. makes any representation or warranty, express or implied, nor accepts any responsibility, regarding the accuracy or completeness of this material, or the advisability of investing in securities or commodities generally, or in HAP or in futures particularly.


About The Rogers(TM)-Van Eck Hard Assets Producers Index (RVEI)
RVEI is a rules-based index intended to give investors a means of tracking the overall performance of a global universe of listed companies engaged in the production and distribution of hard assets and related products and services. The index was developed in concert with commodities investor Jim Rogers and is endorsed by Van Eck Global. Sector weights are set annually based on estimates of global hard assets consumption, and stock weights within sectors are based on their market capitalization, float-adjusted and modified to conform to various asset diversification requirements, which are applied in conjunction with the scheduled quarterly adjustments to the index. Index values are calculated on both a price-only and total-return basis.

About S-Network Global Indexes, LLC

S-Network Global Indexes, LLC is a publisher and developer of proprietary and custom indexes. Since its founding in 1997, S-Network has worked with many of the leading financial services firms in the world on index development, indexation and index-based products, including exchange-traded funds and exchange-traded notes. S-Network currently publishes over twenty benchmark indexes that are licensed to asset managers and investment banks throughout the world. RVEI is part of the RVE Family of Indexes published by S-Network, which includes five additional related indexes: The RVE Composite Index (RVEC), The RVE Liquid Index (RVEXL), The RVE Energy Producers Index (RVEE), The RVE Agricultural Producers Index (RVEA) and The RVE Metals Producers Index (RVEM).

The Rogers(TM)-Van Eck Hard Assets Producers Index (RVEI) has been licensed by Van Eck Associates Corporation from S-Network Global Indexes, LLC for use in connection with Market Vectors-RVE Hard Assets Producers ETF (HAP). HAP is not sponsored, endorsed, sold or promoted by S-Network Global Indexes, LLC, which makes no representation regarding the advisability of investing in HAP.

About Van Eck Global

Founded in 1955, Van Eck Associates Corporation was among the first U.S. money managers helping investors achieve greater diversification through global investing. Today the firm continues the 50+ year tradition by offering global investment choices in hard assets, emerging markets, precious metals including gold, and other specialized asset classes.

Market Vectors exchange-traded products have been offered by Van Eck Global since 2006 when the firm launched the nation's first gold mining ETF. Today, Market Vectors ETFs and ETNs span several asset classes, including equities, municipal bonds and currency markets.

Van Eck Global also offers mutual funds, insurance trust funds, separate accounts and alternative investments. Designed for investors seeking innovative choices for portfolio diversification, Van Eck Global's investment products are often categorized in asset classes having returns with low correlations to those of more traditional U.S. equity and fixed income investments.

HAP is subject to various risks associated with making investments in companies engaged in producing and distributing hard assets and related products and services, such as commodity price volatility, changes in government policies/regulations and world political and economic developments. Additional risks include competitive pressures, technological advances and/or obsolescence, the depletion of resources, labor relations issues, risks associated with foreign investments, a high degree of volatility and the potential of significant loss. The Funds may loan their securities, which may subject them to additional credit and counterparty risk.
Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called "creation units" and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.

Investors may call 1.888.MKT.VCTR or visit for a free prospectus. They should consider the investment objective, risks, and charges and expenses of Market Vectors-RVE Hard Assets Producers ETF carefully before investing. The prospectus contains this and other information about HAP. Please read the prospectus carefully before investing.

Please call 1.888.MKT.VCTR or visit for the most recent month-end performance of Market Vectors-RVE Hard Assets Producers ETF. This information will be available no later than seven business days after the most recent month end.

Van Eck Securities Corporation, Distributor, 99 Park Avenue, New York, NY 10016
SOURCE: Van Eck Global
MacMillan Communications
Mike MacMillan / Lindsey Wetmiller, 212-473-4442

Copyright Business Wire 2008

Tuesday, December 9, 2008

Examine the Indian Commodities Trading Market

NEW YORK, Dec 09, 2008 (BUSINESS WIRE) -- announces that a new market research report related to the Energy industry is available in its catalogue.
Indian Commodities Trading Market

Turmoil in financial markets, slower growth in high-income countries, and rising inflation have all adversely affected growth prospects for developing countries over the near term. Most countries have shown impressive resilience in this turbulent environment, and growth for developing countries as a group is expected to moderate from 7.8% in 2007 to a still strong 6.5% in 2008. However, vulnerable countries that depend on foreign capital flows are likely to experience a sharper slowdown. Moreover, despite strong production growth at the aggregate level, higher food and energy prices have caused real incomes to decline, significantly increasing the hardships faced by the very poor, particularly in urban centers.

A recent article in the Wall Street Journal noted that if one were to examine the historical performance of the S&P 500, one would find that the stock market is trading at the same level at which it was doing so nine years ago. Commodities markets, on the other hand, have been in a bull trend. Some of the major drivers that have contributed in this stupendous growth of commodity markets globally are - Increasing influence of Asian demand, particularly from rapidly industrializing China and India - Increase in commodities prices in international markets as a result of demand growth, reinforced by tight supply capacities, tense geopolitical conditions (especially with respect to the oil market) and intense speculative activity - With the rise in prices of crude oil, metals and minerals, commodity prices reached record historical levels in nominal terms in 2006, which increased by more than 30% between 2005 and 2006 (and by 80% from 2000 to 2006). - Numerous developing countries rely on commodities for export revenues, and commodity production and trade provide employment for more than 2.5 billion people worldwide. - The considerable rise in prices has had an impact on incomes of developing countries. It is estimated that extra revenues resulting from commodity exports were around 6.7 percentage points of GDP for oil-exporting countries and about 3 percentage points for countries exporting mining products.

Increases in demand from developing countries stimulated by a particularly vigorous commodity consumption per unit of GDP compared to that of developed countries, faster economic growth, and increasing population - Globalization of securities and commodities markets - Baby boomers are in the middle of their peak savings years and have been one of the major causes of huge inflows of money into the stock market and into mutual funds. - The increased use of food crops for production of bio-fuels is an important factor that led to large increases in the prices of vegetable oils and grains in 2007, which in turn contributed to an overall 15 percent increase in the index of agricultural prices and a 20 percent rise in food prices. - The prices of metals have increased more than other commodity prices over the last four years, largely because of an especially strong demand in China. - Shortages of equipment and skilled workers have significantly increased development costs, and ore grades are deteriorating.

The report on "Indian Commodities Trading Market" by 'The Knowledge Centre' offers an in-depth analysis of the Global Commodities Trading Market vis-a-vis the Indian Commodities Trading Market. It discusses the overall structure of the Global Commodities Market as well as Indian Commodities Market from an insider perspective and provides a comprehensive study on macro and micro factors driving the growth of this market.

The report furnishes up-to-date facts and figures following meticulous observation with an aim to provide you with real insights into the commodity trading market as it stands today; the knowledge one needs to stand out and make informed decisions. The expanse of such insights into the past and present scenario percolates down to every known commodity currently traded. A conscious effort has been made to provide an overview of all there is to know and know of in the volatile market whilst a detailed product-wise and segment-wise is used in conjunction to expand. Taking into account that Price and Risk being the key drivers of the market, the report presents an exclusive section which maps price growth trend behaviour, factors triggering such behaviour, tracking relative performance of commodities , effects on the market players directly or indirectly using composite indexes from leading sources, the use of various hedging tools such as forwards and options and the relative performance in comparison, the implication and significance of the various regulatory bodies, commissions and statutory acts to highlight a few.

Section I: Commodities Trading - An Overview

1. How Commodities Market Evolved - Historical Perspective
2. How Commodities Trading Market Works 2.1 Involved Parties 2.2 Types of Contracts 2.3 Participants in derivative contracts 2.4 Trading Techniques in Commodities Market 2.4.1 Ready Delivery Market 2.4.2 Specific Delivery Market 2.4.3 Futures Market 2.4.4 Auction Market 2.5 Requirement & Benefits of Commodity Derivatives

Section II: Commodities Market - An Analysis

1. Global Commodities Market - An Overview 1.1 Commodities Trading vis-a-vis Role of Investment Banks 1.1.1 Barclays Capital Commodities - Profile 1.1.2 BNP Paribas Commodity Futures - Profile 1.1.3 Citi Global Commodities - Profile 1.1.4 DB Commodity Services LLC - Profile 1.1.5 Goldman Sachs Commodities - Profile 1.1.6 J.P. Morgan's Global Commodities Group - Profile 1.1.7 Merrill Lynch Global Commodities (MLCI) - Profile 1.1.8 UBS's Commodities Group 1.2 Energy Trading vis-a-vis Energy Trading In-house Divisions 1.2.1 RBS Sempra Commodities 1.2.2 Chevron's Supply & Trading 1.2.3 LITASCO (LUKOIL International Trading and Supply Company) 1.2.4 Koch Supply & Trading 1.2.5 AEP Energy Services (Subsidiary of American Electric Power Company, Inc.) 1.2.6 Duke Energy Trading and Marketing (DETM) 1.2.7 Shell Trading (US) Company 1.2.8 Reliant Energy Securities & Commodities Trading Center 1.3 Commodity ETFs and ETNs 1.4 Commodity Trading vis-a-vis Sovereign Wealth Funds (SWFs) 1.4.1 History of SWFs 1.4.2 Driving Factors, Issues, Trends & Opportunities 1.4.3 Sources of Capital 1.4.4 How & where the money is invested - Market Size & Projections 1.4.5 Fund Rankings: Largest Funds by Assets under Management

2. Global Commodities Market Analysis 2.1 Global Commodities Market Size & Forecast 2.2 Commodity Market Profiles - Quick Points (Profile, Producers, Consumers, Largest Markets, Price Performance & Top Companies) 2.2.1 Aluminium Market 2.2.2 Cocoa Market 2.2.3 Coffee Market 2.2.4 Copper Market 2.2.5 Cotton Market 2.2.6 Gold Market 2.2.7 Nickel Market 2.3 Global Commodities Indexes - Performance Analysis 2.3.1 Dow Jones - AIG Commodity Indices 2.3.2 Merrill Lynch Commodity index eXtra (MLCX) 2.3.3 S&P GSCI(TM) Composite Index 2.3.4 Reuters/Jefferies-CRB(R) Indices
3. Issues, Trends & Opportunities 3.1 Impact of higher commodity prices 3.2 Movement of oil prices 3.3 Performance of agriculture commodities 3.4 Companies turn to top derivatives dealers for help in hedging 3.5 Carbon to be the biggest global commodity market by 2012 3.6 Renewed interest from investors 3.7 More sophisticated tools & platforms 3.8 Investment banks are major players 3.9 ETFs, changing the equation of Commodities Investment 3.10 China - Major Demand Driver of Global Commodities 3.11 Macro-Economic Driving Factors 3.12 Factors affecting pricing of base metals 3.12.1 Lead (75% y-o-y growth) 3.12.2 Tin (66% y-o-y growth) 3.12.3 Zinc (40% y-o-y decline) 3.12.4 Nickel (4% y-o-y decline)

Section III: Indian Commodities Trading Market

1. Indian Commodities Market - An Overview
2. Indian Commodities Market Size - An Analysis 2.1 MCX vs. SENSEX - A Comparative Analysis
3. Indian Commodities Market - Performance Analysis 3.1 Aluminium Market - Future Contract Value (Jan 07 - Jul 08) 3.2 Coffee Market - Robusta Futures Contract Value (Jan 07 - Aug 08) 3.3 Copper Market - Copper Futures Contract Value (Jan 07 - Jul 08) 3.5 Crude Oil Market - Crude Oil Futures Contract Value (Jan 07 - Aug 08) 3.6 Gold Market - Futures Contract Value (Jan 07 - Aug 08) 3.7 Chana (Chickpea) Market - Futures Contract Value (Jan 07 - May 08) 3.8 Nickel Market - Futures Contract Value (Jan 07 - Jul 08) 3.9 Zinc Market - Futures Contract Value (Jan 07 - Jul 08) 3.10 Lead Market - Price Performance (Jan 07 - Aug 08) 3.11 Cardamom Market - Futures Contract Value (Jan 07 - Jul 08) 3.12 Jeera (Cumin Seed) Market - Futures Contract Value (Jan 07 - Jul 08) 3.13 Lead Market - Futures Contract Value (Jan 07 - Jul 08) 3.14 Mentha Oil Market - Futures Contract Value (Jan 07 - Jul 08) 3.15 Natural Gas Market - Futures Contract Value (Jan 07 - Jul 08)
4. Government Regulations, Initiatives and Reforms 4.1 Setting up a Committee on Role of Futures Trading in 1993 4.2 Setting up of Forward Market Commission in 1953 4.3 Forward Contracts (Regulation) Act, 1952 4.4 Forward Contracts (Regulation) Amendment Bill, 2006 4.5 Forward Contracts (Regulation) Amendment Ordinance, 2008 4.6 Commodities Trading Tax 4.7 Import duty cut & export duty hike in Metals industry
5. Issues, Trends & Opportunities 5.1 Commodity Trends: Hurt by economic slowdown 5.2 Multi Commodity Exchange (MCX) launched currency futures trading 5.2 Hedging ban a slow political process to kill futures market 5.3 Commodity investment goes retail 5.4 Unresolved Issues and Future Prospects 5.5 Scrap now being considered a waste commodity 5.6 Commodity and Equity Markets have been moving in tandem 5.7 Indian Bt Cotton to hit market soon 5.8 Warehousing to take giant leap in India

List of Charts

Chart 1: Mode of Financing in Commodities Trading Chart 2: Business Operations Model of a Trading Process in a Commodity Exchange Chart 3: SWFs Market Projections (2007-2012) Chart 4: Comparison of AUM of SWFs and Asset Managers, Private Equity and Hedge Funds ($ billions) Chart 5: Sovereign Wealth Fund Deal Volume (1997-2007) Chart 6: Sector-wise growth: Exchange trade of commodity derivatives by volume (03-06) Chart 7: World's leading Commodity Exchanges in developing countries - 2006 Contracts ($millions) Chart 8: Major base metal commodity exchanges & emerging markets Chart 9: Base Metal Price Trend - 2006 vs. Present Price Chart 10: Cocoa Monthly Averages of Daily Prices (Oct 07- Oct 08) Chart 11: ICO Indicator Prices - Annual & Monthly Averages (1998 to 2008) Chart 12: Global Cotton Average Price Trend (`A` Index (cents/pound)) - 1988 -2008 Chart 13: Merrill Lynch Commodity index eXtra (MLCX) - Commodity Weightings Chart 14: MLCX Weights as of January 2008 Chart 15: MLCXTR outperformance vs. SPGCCITR & DJAIGTR Chart 16: Reuters/Jefferies CRB(R) Total Return Index: Jan 82 - Sep 08 (monthly close) Chart 17: Forecast of China's Share of the Growth in Demand for Global Commodities- 2009 Chart 18: Types of Commodities Traded in India Chart 19: MCX vs. SENSEX - Comparative Analysis (Jan 06-Sep 08) Chart 20: India's Aluminium Futures Contract in Value (Rs. Crore) (Jan 07 - Jul 08) Chart 21: India's Coffee Robusta Futures Contract in Value (Rs. Lakhs) (Jan 07 - Aug 08) Chart 22: India's Copper Futures Contract in Value (Rs. Crore) Chart 23: India's Crude Oil Futures Contract in Value (Rs. Crore) Chart 24: India's Gold (1Kg) Futures Contract in Value (Rs. Crore) Chart 25: India's Gold (100g) Futures contract in Value (Rs. Crore) Chart 26: India's Chana (Chickpea) Futures Contract in Value (Rs. Crore) Chart 27: India's Nickel Futures Contract in Value (Rs. Crore) Chart 28: India's Zinc Futures Contract in Value (Rs. Crore) Chart 29: India's Lead Futures Contract in Value (Rs. Crore) Chart 30: India's Cardamom Futures Contract in Value (Rs. Crore) Chart 31: India's Jeera (Cumin Seed) Futures Contract in Value (Rs. Lakhs) Chart 32: India's Lead Futures Contract in Value (Rs. Crore) Chart 33: India's Mentha Oil Futures Contract in Value (Rs. Crore) Chart 34: India's Natural Gas Futures Contract in Value (Rs. Crore)

List of Tables

Table 1: The Global Economic Outlook (2006-2010)
Table 2: Major Global Commodity Exchanges
Table 3: Major Asian Commodity Exchanges
Table 4: Major European Commodity Exchanges
Table 5: Commodity Traders - List of top banks, Financial Institutions & other top companies
Table 6: Fund Rankings: Largest Funds by Assets under Management
Table 7: Global Commodity Prices - Monthly & Yearly Averages (Jan 06 - Sep 08)
Table 8: Commodity Forecast Nominal Prices (2007-2020)
Table 9: World Cocoa Market Estimates (in million metric tons) - 2002-2008
Table 10: ICO Indicator Prices - Annual & Monthly Averages (1998 to 2008)
Table 11: Global Cotton Average Price Trend (`A` Index (cents/pound)) - 1988 -2008
Table 12: Comparison of Commodity Indexes
Table 13: Dow Jones AIG Total Return Performance %
Table 14: Dow Jones AIG Excess Return Performance %
Table 15: Dow Jones AIG Yearly Returns (1990-2008)
Table 16: DJGI AIG Commodity Index - Commodity Weightings
Table 17: Merrill Lynch Commodity index eXtra (MLCX) - Commodity Weightings
Table 18: S&P GSCI(TM) Components and Dollar Weights (%)
Table 19: S&P GSCI(TM) Index Values
Table 20: Commodity Exchanges in India
Table 21: Trend of Commodities in National Commodity & Derivatives Exchange (Oct 08)
Table 22: Trend of Commodities in Multi Commodity Exchange of India (Oct 08)
Table 23: Trend of Metals in Multi Commodity Exchange of India (MCX) and National Commodity & Derivatives Exchange (NCDEX) (Oct 08)
Table 24: Trend of Oil Commodities traded in NYMEX (Oct 08)
Table 25: Trend of Metal commodities traded in NYMEX (Oct 08)
To order this report: Indian Commodities Trading Market

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Copyright Business Wire 2008

Commodities: South African Gold Production Down

Gold production falls in South Africa, although other commodities do better

In terms of volume, South African gold production has fallen by 14.4 percent in October. Mineral production fared better for the country, as overall it gained 3.5 percent over October 2007.

That will harm the country as gold futures and gold commodity prices will continue to go up over the next several years, especially as the economic conditions continue to deterioriate.

Gold futures trading will be one of the few sectors that not only provide safety for commodities investing, but for all investors as well. The gold commodity price will provide good returns along with a haven, making gold as a commodity a surety to continue to rise in value.

Take out gold and mineral production rose by 6.5 percent, according to the South African Web site.

Much of the decline is attributed to the ongoing electric power grid, which state-owned Eskom seemingly is not able to fix.

At this time Eskom has cut back on power supply to mines to about 90 to 95 percent.

Numerous factors continue to hamper consistent commodity success in the country. If they can deal with infrastructure and safety problems more efficiently, the country would thrive, especially in metals.

Saturday, December 6, 2008

Commodities: EPA Wants to Charge Fees Livestock

Livestock as a commodity will suffer under asinine EPA initiative

The nuts are definitely running the asylum if the proposed, moronic, federal initiative to charge huge fees to farmers or ranchers for each animal they have actually passes.

Parameters for the fees would be farms with over 25 dairy cows, 50 beef cattle or 200hogs. The price tag for each one: $20 for each hog; $87.50 per beef cattle; and $175 for each dairy cow.

A significant number of livestock owners have said if the proposal were to go forward, it would effectively bankrupt them, which is evidently what some of the nutty environmentalists want.

Not only would it bankrupt numerous farmers and ranchers, but the costs would raise consumer prices so high it would be extraordinary.

This is of course of the human-haters and earth worshippers want. They want to ram their vegan/vegetarian lifestyle down the throat of the rest of the citizens in the U.S.

The reason given behind this potential atrocity is the animals pollute the air with the belches and gas. I'm not kidding, that's what's behind this idiocy.

According to Ken Hamilton, executive vice president of the Wyoming Farm Bureau Federation, the average cost to just a medium-sized cattle ranch would be from $30,000 to $40,000 a year.

According to EPA spokesman Nick Butterfield, the fee would fall under the federal Clean Air act. With a straight face he added they're reviewing the comments of the public before any further steps are taken.

Comments of the public? Let's see. Do we want to pay higher prices for our meat? Do we want to resort to less safe meat from foreign countries? How about importing our milk from China? No? Ok. The public has spoken.

As a matter of fact, the energy and time I've had to take to waste my time writing about this drivel should be charged to the EPA. Where can I send them my invoice?

It looks like the EPA needs to be abolished if it's going to punish commodites, and ultimately people, through these horrible ideas.

Thursday, December 4, 2008

Commodities: Cocoa Holding Up Well

While commodities continue to get battered, cocoa is performing stongly for the group, actually growing by 15 percent for the year, standing at about $2,372 a metric ton.

So far chocolate sales this year have been decent, but like everything else, much depends on the economy as to whether that will continue.

A major concern in this area is dark chocolate, which uses more cocoa than its milk chocolate cousin.

The good news is cocoa-related chocolate is a comfort food, and historically during times like these - along with coffee - have grown in usage.

There's always a bright side for specific commodities, as demand for some over others will always be part of human desire.