Friday, April 30, 2010

Potash (TSE:POT), Intrepid Potash (NYSE: IPI), Agrium (TSE:AGU), Mosaic (NYSE:MOS), CF Industries (NYSE:CF) Look Strong

Potash (TSE:POT)(NYSE:POT), Intrepid Potash (NYSE: IPI), Agrium (NYSE:AGU)(TSE:AGU), Mosaic (NYSE:MOS) and CF Industries (NYSE:CF) should perform strongly in the months ahead, as the overall agricultural chemicals sector looks strong, based on corn demand.

Other agricultural chemicals companies should do well too, but this is just a sampling of some companies poised for growth.

Two major factors are the foundation for this assertion, and one is the price of gas, which has risen to the point where growing corn for ethanol could be profitable again, and the measured nutrient levels of soils are down, meaning corn will need a hefty dose to perform well, and the farmers will make sure they get it.

This should increase the price of fertilizer for the buying period of June through September, which ultimately should push the share prices of the agricultural chemicals companies up with them.

Marc Faber, Jim Rogers on Greece Bailout

In a Bloomberg interview, Marc Faber reiterated what billionaire Jim Rogers has been saying for some time, and that is that Greece shouldn't be bailed out by the European Union or the IMF, as it's only postponing the inevitable, and rewarding excessive consumption.

By excessive consumption, it means the people of Greece being given handouts from the Greek government which the Greek government couldn't afford to pay.

That is obvious to everyone now, but it was hidden from their fellow European neighbors, who are now foolishly ready to bail out Greece, which will only postpone the crisis temporarily while inviting more countries to the postponement party.

Jim Rogers has stated in the recent past a number of times that if the EU was serious about the euro, they would allow Greece to fail so the rest of the EU countries with similar irresponsible financial practices will start getting their houses in order and implement much strong austerity programs.

In other words they need to cut down on spending and eliminate a lot of the government sponsored and central bank enabled programs and perks that are in no way sustainable. It's also another way of saying governments need to get smaller and central banks hopefully some day eliminated as being a part of the financial network around the world.

Faber adds that Greece, when looking at it in a similar way as you would any corporation, should be allowed to go bust and no loans should be extended to them.

Also banks holding loans should write off the loans from 30-50 percent of the face value of them.

In the end, all this will do is lead to the ultimate bust in the view of Faber, who says the only thing democracies are doing now is postponing everything until it all blows up in their faces. They will never escape this, and eventually they'll all have to pay the price.

Loans simply don't take care of the reason behind the crises in Europe and the other democracies, and the only tool in Faber's outlook they have is the tool of postponement by loans. There is a day coming when postponement will no longer work and the entire system will collapse under the weight of entitlement and political expediency.

Alcoa (NYSE:AA) Continues Cutting Jobs

To increase productivity and safe costs, Alcoa (NYSE:AA) continues to cut jobs across the world to meet their goal of increasing productivity by 5 percent.

The latest cuts come at the Portland smelter of the company, where they're getting rid of 40 jobs.

According to Australian Workers Union state secretary Cesar Melhem, Alcoa has cut over 100 workers and contractors over the last year and a half.

Alcoa has resisted just cutting hours and has chosen the elimination of jobs as their strategy for increased productivity.

Thursday, April 29, 2010

Halliburton (NYSE:HAL), Cameron (NYSE:CAM) Down On Connection to Deepwater Horizon Oil Rig Explosion and Spill

While BP (NYSE:PB) (LON:BP) stock has been getting hammered over the oil rig explosion, other companies like Cameron (NYSE:CAM) and Halliburton (NYSE:HAL) have started to fall because of their connection to the Deepwater Horizon oil which exploded last week.

Transocean Ltd (NYSE:RIG), which owned the rig, continued to get hit hard from the accident as well.

When asked about their exposure to the liability, Cameron (NYSE:CAM) said they're insured for $500 million if they end up being punished in any manner from the event.

This could change once the situation with the oil spill is handled, and once an investigation ensues, the conclusions will probably be targeted, which will help some of these companies, but will hurt some even more if they're considered the one liable for what happened.

BP (NYSE:BP) Drops About $26 Billion After Oil Rig Explosion

It's hard to tell at this time what the ultimate damage to BP (LON:BP) (NYSE:BP) will be, but it has already lost close to $26 billion in market value just since last week when their offshore oil rig exploded,

The cost in human life is presumed to be 11, oil continues to drain from the seabed at an estimated 5,000 barrels a day, and the news will continue to remind everyone that it is happening day after day until they control of the situaton.

With BP to be responsible for the costs of the cleanup, the public relations disaster along with that could punish them for some time to come.

The problem is no one knows how bad it'll get before things turn around in the cleanup, so that keeps a cloud dangling over the head of BP until that is figured out.

It's scary to think of the market value loss already experienced in a few days and what it may end up being.

Exxon Mobil (NYSE:XOM) Earnings Up 37 Percent

Taking everything into account, Exxon Mobil (NYSE:XOM) had a good quarter, although the accrual of health care costs from the disastrous bill passed by the Democrats caused the company to under-perform estimates.

Earnings for the quarter increased 37 percent to 4.6 billion, or 92 cents a share. Analysts had looked for $1.41 cents a share, giving the impression of widely missing their numbers.

Revenue increased to $90.3 billion, or 41.1 percent over the same quarter last year.

Costs associated with the health care bill came to about $200 million, or 4 cents a share.

Wednesday, April 28, 2010

Vale SA (NYSE:VALE), BHP Billiton (ASX:BHP) and Rio Tinto (ASX:RIO) Pressing China on Iron Ore Prices

Vale SA (NYSE:VALE) (SAO:VALE5), BHP Billiton (ASX:BHP)(NYSE:BHP) and Rio Tinto (ASX:RIO) (NYSE:RTP) have reportedly threatened China that they will cut off iron ore supplies if the steelmakers in the country don't accept the price demands they're offering, according to the China Iron & Steel Association.

The major three iron ore producers in the world have sought price increases from between 90 percent to 100 percent, as demand for iron ore grows around the world, with China being the largest consumer of iron ore.

All of this started when the mining companies broke with the past practice of selling iron ore on annual contracts and negotiated a 90 percent increase in price with mills in Japan.

In a counter move, China has said they have begun an investigation to see if the three large iron ore producers are monopolizing supplies.

Apparently China has about two months of iron ore stockpiled as of the latter part of March, which means the pressure ramping up with only about a month left at this time.

Demand for steel is estimated to grow by over 10 percent in 2010, which has resulted in a growing demand for iron ore in competing countries and businesses.

Tuesday, April 27, 2010

GlobalX Silver Miners ETF (NYSEArca:SIL) Launches

Last week GlobalX Funds launched the GlobalX Silver Miners ETF (NYSEArca:SIL), becoming the only ETF in the world tracking silver companies at this time.

I would have said the only ETF tracking silver miners, but since Silver Wheaton (NYSE:SLW) is one of its major holdings, that wouldn't have been completely accurate, although for the most part it is silver mining companies the new ETF tracks.

Along with Silver Wheaton there are 24 other stocks GlobalX Silver Miners ETF tracks, with the other three major ones being Pan American Silver (Nasdaq:PAAS), Mexican miner Industrias Penoles and Fresnillo, another Mexican-based silver mining company.

Together these four account for just under 50 percent of the ETF.

GlobalX Silver Miners ETF has an expense ratio of 0.65 percent.

JPMorgan's (NYSE:JPM) New Commodity Fund (HDSAX)

The mutual funds unit at JPMorgan (NYSE:JPM) - JPMorgan Funds - has just launched a new commodity futures fund, which offers an actively managed commodities futures fund created to deal with the volatility that can be part of investing in commodities.

Dubbed the Highbridge Dynamic Commodities Strategy Fund (HDSAX), it's goal is to generate returns whether the price of commodities are falling or rising.

The goal according to JPMorgan will be to generate about 16 percent on an annual basis; a similar return in line with the Dow Jones UBS Commodities Index.

The breakdown in net commodity exposure of the fund is 78.8 percent precious metals and financial commodities, 15.5 percent agriculture, 13.1 percent energy and 6.2 percent industrial metals.

Caterpillar (NYSE:CAT), Alcoa (NYSE:AA) and DuPont (NYSE:DD) Drive Dow Down

One day stocks like Caterpillar (NYSE:CAT), Alcoa (NYSE:AA) and DuPont (NYSE:DD) can lead the Dow up, and other days it can lead them down, and today it was downwards these stocks led the Dow, as it plunged the most in one day since February 4, declining 213.04 points, or 1.9 percent, to 10991.99.

Caterpillar dropped 4.35 percent, Alcoa 4.34 percent, and DuPont 3.8 percent during regular trading hours.

Most of this is in response to the downgrading of Greek debt to junk status and also the downgrading of Portugal debt down two levels, confirming the European Union problems are far deeper than Greece alone, and is in grave danger of crumbling under the weight of irresponsible monetary practices which gave in to demands of their people for wages and benefits they couldn't afford to offer them in a sustainable way.

Gold was driven up in price as the preferred safety haven in light of the extraordinary sovereign debt challenge facing Europe.

Newmont (NYSE:NEM) Soars on Copper, Gold Prices

Newmont Mining (TSE:NEM)(NYSE:NEM) had its earnings soar as increasing prices of gold and copper generated earnings of $546 million, or $1.11 a share.

Production was another key factor in the solid quarter for Newmont, with gold production up slightly, but copper production was over double what it was a year ago, as well as copper prices, which almost doubled from $1.69 a pound last year during the same quarter to $3.33 a pound the latest quarter.

Average price for gold per ounce was $1,106 an ounce, up from $906 an ounce last year.

“Fundamentals including evidence of a rebounding market [for gold] in India and growth from the jewelry market in China, plus sustained flows and historically low central bank sales continue to support gold price performance,” Newmont CEO Richard O’Brien told analysts in the conference call.

Investors Flee to Gold for Safety

Gold prices moved higher today as investors fled to safety after the S&P downgraded Greece and Portugal, with Greece debt now being classified as junk and Portugal debt being downgraded two levels.

While ongoing opposing possibilities continue to weigh on gold, for now it seems things will continue to support gold prices, and they'll continue their upward move.

The major event waiting on the sidelines is the increase in interest rates by the federal reserve, which they've said isn't going to happen any time soon. But investor will listen closely as usual to any hint concerns over inflation could cause that to change.

Monday, April 26, 2010

Marc Faber: China and Australia

If the insight of Marc Faber is correct concerning China, and he's not the lone person saying this, Australia, and any country strongly relying on Chinese demand for raw materials, or good and services, will find themselves going up and down with the Chinese economy, moving in unison with it.

Of course this is great as long a China continues to grow, but when it stalls, or if there is a bursting of their real estate market, it'll cause enormous repercussions for any business or country overly dependent on the Chinese, which to a large degree Australia is one of the leading ones.

China has largely been the reason Australia didn't suffer as much as other Western countries, as their focus on shoring up their domestic market has resulted in hundreds of billions being used for infrastructure projects, and some others that are dubious at best.

Some people who claim to have seen it say there are huge numbers of empty buildings sitting around which were built to create temporary jobs and nothing else. What happens when they sit around and generate no income? What happens when the bills come due in those cases?

Even if the Chinese government let's it all go, it was real money used to build, and that money was put into the system and has a significant impact on the economy.

China continues to say it's going to take measures to cool down its economy, but so far that has been only words and not actions. One way or the other China will have to cool off, as no country can continue to grow at that rate without severe consequences, especially since there may be many projects which have no use and no way to pay for themselves.

No matter if someone is an investor, a country or a company, the way of China can't continue to be only upward, and when that stops, there's going to be an awfully big headache to deal with, and quite probably a long one.

China should be a part of everyone's portfolio in some way, but those overly invested like Australia, will go as China goes. For now that's working great, what's going to happen when it no longer is?

Australia and others will discover that while they enjoyed a fairly sound economy during the worst of the great recession, they will probably suffer when other countries and economies are stronger, and China finally comes down to earth. The only question is how hard the economic gravity pulls them down, and if they land with a crash or only a thud. At this time it definitely seems a crash landing is what's ahead for Australia; it's not a matter of if, it's only a matter of when, and that may take some years (or not), but it will definitely come.

Jim Rogers: Sovereign Debt Risk

While politicians have used the disfavor of the financial institutions around the world to focus on regulating the industry, which is of course another way of saying they are trying to make it look like they're doing something, the real issue, according to investor and commodity expert Jim Rogers is the sovereign debt risk we all face.

The reasons politicians don't want our focus too much on this is it starts to hit too close to home that the central banks and government financial institutions are behind the extraordinary risk we now face of debt default of nations, which dwarf the banking industry.

What it would unveil is the outrageous practices of the government and socialist around the world who continue to cater to the entitlement fantasies people have been taught to expect the governments to provide them with.

Workers in Greece are basically protesting because other countries in the European Union are pressuring their government to quit doing that very thing, as it results in the people of other nations having to bail them out for all the unbelievable perks they're given as to what they think life owes them.

As many entrepreneurs and believers in free markets know, the redistribution of wealth eventually runs into a brick wall, and that brick wall is there is no more money to legally steal from the productive. Essentially, that's what's happening in Greece through pension and health plans, along with wages beyond what the market can support.

Those people who attempt to make it look like a bailout of Greece is a standalone event are either delusional or outright liars. Who in their right mind doesn't know once Greece is bailed out that Portugal, Italy and Spain will be right behind them, and possibly Ireland.

The soft underbelly of the redistributionist, socialist, progressive dragon has been revealed, and it's vulnerable and it's ugly.

As Jim Rogers points out, why are we focusing on banks rather than the practices of governments. The risk we face is with entire governments collapsing. A bank is almost nothing in comparison with that. How many banks after all are larger than Greece? And they're just a small fish in the pond. Wait till the other beggar nations come knocking on the European Union door. Then the clueless will begin to understand what it is we face, if they're willing to tear the mask off of it and call it like it is; especially the mainstream media, whose coverage is so slanted and clueless it can't be trusted in that regard.

Rogers also continues to point out the days of the power of the huge financial institutions are over anyway, and as far as investing goes, we need to focus on those who produce real things, like raw materials and agricultural. That's where the economic power and investment opportunities are shifting, and as he always notes, those who make the money in the future will be the farmers.

Or I would add, those who invest in commodities and real stuff will be those who make the money.

Alcoa (NYSE:AA) Debt Going Junk?

Alcoa (NYSE:AA) is skating on thin ice with its debt rating, as the struggling maker of aluminum is, in the eyes of many onlookers, close to being downgraded to junk status on its debt.

This of course would make it even more difficult for the company as the cost of borrowing would rise, and in some cases lock them out from access to capital.

Those following the company say there is nothing in the earnings of Alcoa to justify them being designated as investment-grade on their debt, and so it's possible we could hear that they're downgraded sometime soon.

It probably won't be until sometime in 2011 or 2012 before that changes for them.

The company is trying to make a public case for its strong cash flow, which they say they will use to pay down the debt, but it remains to be seen if they've made their case or not.

An additional $50 million could be added to the cost of doing business for Alcoa if they are downgraded to junk status.

Freeport (NYSE:FCX) Investing in Sulphur Plant

Freeport-McMoRan (NYSE:FCX) will begin construction on the Dos Pobres Copper mine at Safford, Arizona, where a plant built for sulphur burning will be launched.

What the plant will produce is sulfuric acid, which is used in the recovery of copper from ore.

Freeport spokesman Richard Peterson said, “The plant will burn elemental sulphur that will be brought by railcar to a transfer facility that will be built southeast of Fort Thomas. Sulphur will be transferred from the railcars to trucks for transportation to the sulphur burning plant."

The project had been set back for about 16 months due to slowing demand during the height of the recession.

Freeport will invest about $150 million in the sulphur burner which should be operational sometime within the next twelve months.

Newmont Mining (ASX:NEM), Barrick Gold (TSE:ABX) and Goldcorp (TSE:G) Quarterly Earnings Preview Report

Newmont Mining (ASX:NEM) (NYSE:NEM), Barrick Gold (TSE:ABX)(NYSE:ABX) and Goldcorp (TSE:G)(NYSE:GG) are about to release their quarterly reports this week, and all of them look like they've enjoyed a solid quarter.

It looks like Newmont Mining and Barrick Gold will outperform Goldcorp the last quarter, even with Goldcorp's usual low-cost operational advantage.

Barrick should explode its earnings per share, with estimates they'll increase by about 92.5 percent from the same quarter last year. Newmont looks good there to, as they're expected to generate 33.3 percent growth in earnings per share. Goldcorp on the other hand looks like they're going the opposite direction with their earnings, projected to drop by 32.5 percent from last year during the same quarter, although they should still enjoy about a 27 percent growth per share.

Last year Goldcorp generated 40 cents earnings per share.

Caterpillar (NYSE:CAT) Revenue Down, Earnings Up

Caterpillar (NYSE:CAT) gave the Dow a boost today as its earnings exceeded expectations for the last quarter.

Earnings in the first quarter was 36 cents a share in contrast to the same quarter last year when they had a loss of 19 cents a share. Revenue for the quarter plunged by 11 percent though.

As usual, China was largely the impetus behind increased sales in some of the sectors of the company, particularly mining and construction equipment, including excavators and bulldozers.

Sales to mature countries remain weak as expected.

In probably the most important news for the company, Caterpillar did give positive guidance going forward, and that is what is more important than the numbers, as everything looks good after the disaster last year.

Nationalizing Gold Mining in Venezuela

The latest move by Venezuelan President Hugo Chavez to take over the economy of the country is nationalize gold mining concessions, adding to the already nationalized metal, utilities and oil in the country.

While this is at the threat stage from Chavez, it's highly likely he will follow through with it, as he's ready to end the grants because of the “capitalist mafias” which exploit his country, according to the dictator.

After nationalizing the oil industry, ConocoPhillips (NYSE:CON) and Exxon Mobil (NYSE:XOM) have pursued a process of arbitration against Venezuela, who essentially stole the assets of these companies from them.

The good news is there aren't too many gold mining companies working in the country, and the gold reserves aren't that important in the overall picture, as the country doesn't produce that much, so it'll be easily replaced by ramping up production at mines outside Venezuela.

One gold mining company already battling Chavez is Gold Reserve Inc. (AMEX:GRZ), which is based in Washington, who has also entered arbitration against Venezuela for having their gold mining projects taken over by the country. The company poured $300 million to develop the projects before the government took them over.

And for anyone dumb enough to do it, Venezuela has announced they're looking for partners to help them develop the Las Cristinas project, which is one of the larger undeveloped gold deposits in the world.

Saturday, April 24, 2010

ConocoPhillips (NYSE:COP) Should Beat Estimates

In their upcoming quarterly report, analysts are looking for ConocoPhillips (NYSE:COP) to exceed expectations, with earning per share expected to come in at $1.37, on revenue of $33.3 billion.

Last year in the same quarter earnings per share were $0.58 on revenue of $27.7 billion.

On an annual basis, the Conoco should enjoy earnings per share of $6.00.

ConocoPhilips' earning report is scheduled for April 29, 2010.

BG Group (LSE:BG) Battling for Karachaganak Stake

With Kazakhstan desiring to push its way into a stake into the huge Karachaganak oil and gas field in the western part of the country, BG Group (LSE:BG) has been fighting the move, as it would mean they would lose a portion of its stake in the lucrative project.

Also part of the consortium operating the field are Eni SpA (MI:ENI) from Italy, LUKOIL (MM:LKOH) from Russia and Chevron (NYSE:CVX) from the U.S.

The latest pressure from Kazakhstan to force its way into the consortium is to accuse the KPO of transgressing the immigration laws of the country.

Another bizarre strategy was to accuse Karachaganak of producing more oil and gas than under agreement with the government in 2008.

Ongoing talks are reportedly strained, and it's understandable why when you look at what the Kazakhstan government is attempting to do.

Caza Oil & Gas (TSE:CAZ) Successfully Drilled Matthys-McMillan Gas Unit #2

Caza Oil & Gas (TSE:CAZ) (AIM:CAZA) announced it has successfully drilled the Matthys-McMillan Gas Unit #2 development well in the Wharton West Wilcox Field in Texas.

The drilling reached a depth of 15,000 feet and found "multiple gas bearing sands."

Caza holds a 19.61 percent working interest in the well and a 14.32 percent net revenue interest.

Operations for completion and testing are already happening, and the company said it should be finished in about 30 days.

BP (LSE:BP) Production Not Affected by Oil Rig Explosion

After the explosion in connection with the oil rig drilling in the Gulf of Mexico, BP (LSE:BP) (NYSE:BP) shareholders were wondering how that would have an impact on oil production.

As far as the area the company was drilling in, it was a relatively small deposit and won't have any significant impact on oil supplies for the company.

The estimate was for less than 100 million barrels at the location, and was only being considered commercially because it was nearby other pipliines.

In that particular area BP produces about 450,000 barrels a day, about 12 percent of BP's total production.

Morgan Stanley (NYSE:MS) North Sea Forties

Some traders said last week that Morgan Stanley (NYSE:MS) will probably be loading North Sea Forties crude onto a gigantic crude carrier some time next week.

Hound Point, Scotland is the destination pointed out for where the Ashna will pick up the crude oil.

Ship brokers said Morgan Stanley has a one-year charter of the VLCC as of November 2009 at costs of close to $30,000 a day. Morgan also has an option to extend the time charter another year if they choose.

It's unclear whether Morgan Stanley will float the Ashna in the North Sea area again.

Jim Rogers: Let Greece Go Bankrupt

Billionaire investor and commodity expert Jim Rogers continues to urge the European Union to allow Greece to go bankrupt in order for the euro to be considered a serious currency.

If Greece is bailed out, it would show Europe isn't willing to regulate its member countries, and are willing to allow them to be fiscally irresponsible.

Rogers said, "The way to solve this debt problem is not with more debt. The idea that you would solve a problem with too much debt and too much consumption with more debt and more consumption, that defies comprehension.

"If Greece went bankrupt, it will clean up the system, (the) euro will go down for a while but then in my view, the euro will be a very strong currency."

Rogers added that there isn't a need for more regulation, but rather for more competent regulators. He called Obama's drive to regulate the markets even more as "ludicrous." Rogers says this was the cause of the financial crisis in the first place.

Precious metals and agriculture is considered the most solid places to put your money by Rogers, and he continues to hold to that theme.

Newmont Mining (NYSE:NEM) Offering Dividend

Newmont Mining Corporation (NYSE:NEM) (TSE:NMC) announced their board of directors has declared a quarterly dividend of $0.10 for each common share held by shareholders.

Also Newmont Mining Corporation of Canada Limited (TSX:NMC) declared a $0.1003 dividend on exchangeable shares.

For the regular Newmont Mining dividend, those holding shares as of the close of business on June 15, 2010 will by paid on June 29, 2010, while those holding shares of Newmont Mining Corporation of Canada Limited will be subject to the same dates and conditions as the above.

Archer Daniels Midland's (NYSE: ADM) Double Taxation Relief

At a co-generation plant in Clinton, Iowa, Archer Daniels Midland (NYSE: ADM) won't have to pay double taxation, as they were originally slated to before specific legislation was introduced to deal with the issue.

What Archer Daniels Midland will be able to do under the new bill will be to use a tax credit in relationship to it utility replacement tax and place it against their local property taxes, effectively eliminating double taxation.

The self generator status which would usually eliminate the problem didn't apply to ADM because it sells electricity; the reason the bill had to be written.

Friday, April 23, 2010

Monsanto's (NYSE: MON) India Corn Trials

Monsanto (NYSE: MON) will always be a company that takes two steps forward and one step back, as fears over the genetically modified seeds they offer make it slow going as far as introducing new products into different parts of the world.

That's the same in India, where brinjal is yet to be approved, while a new variety of corn is being tested which includes Bacillus thuringiensis as an insect control mechanism, where the gene is injected into the corn, and a protein would also be added to the corn to protect it against herbicides.

Bacillus thuringiensis is a natural ingredient normally used against worm-type of pests, like the tomato horn-worm that attacks the fruit.

Corn is of course susceptible to worms as well, the reason for including it in the corn.

Assuming the trials go well, the new corn will be introduced into India in 2012-2013. There aren't any expected roadblocks along the way that would interfere with the process going forward.

Freeport-McMoRan (NYSE:FCX) Locks in Profits

Freeport-McMoRan (NYSE: FCX) has a great quarter as expected, as the mining company, through its gold, copper and molybdenum metals carved out a nice profit of $897 million, or $2.00 a share.

Last year during the same quarter they only generated $0.11 a share.

Even with gold production dropping to 478,000 ounces and copper to 960 million pounds, a little less than last year, molybdenum surged to 17 million pounds and the price increases in all of them more than made up for production decline.

As with every significant copper mining company, Freeport enjoyed the rise of copper prices, whose realized price was $3.42 a pound, almost twice what it was last year in the same quarter.

Gold rose from $960 an ounce to $1,110 an ounce this year, and molybdenum had a solid 30 percent upward movement, reaching $15.09 a pound. Add to that the additional production of molybdenum and it had a great effect on the earnings.

With copper and gold, prices are expected to continue to rise, and the demand for steel and the use of molybdenum in connection to that sure to grow, everything is running on all cylinders for Freeport.

Gold, depending on where the price has been when the next quarterly report comes out, is probably the least sure in the short term, as there are a lot of variables and factors which could go either way for the metal, and things like Greece, inflation, safety, the euro and the U.S. dollar all connected to its performance.

So many of these factors are moving on almost a daily basis, and so gold will swing during its ultimate continuing upward climb, but mining companies, in that regard, will go up and down with it. Freeport is one of those, although they won't swing as much as the junior miners who are more susceptible to the price movements.

Nucor (NYSE:NUE) CEO Concerned with Steel Overcapacity

The CEO of Nucor (NYSE:NUE), Dan DiMicco, said recently he has concerns over Severstal, US Steel (NYSE:X) and ArcelorMittal (AMS:MT) (NYSE:MT), as they restart blast furnances in the US which will add approximately 8 million short tons of capacity to the market.

DiMicco stated, “We have serious concerns that capacity being brought back will get ahead of the demand in the marketplace because the economy isn’t really growing, we are not creating jobs. We are not seeing a lot of commercial construction, nonresidential construction, so it’s a concern. And it should be a concern for everybody. And anybody that says it’s not an issue is kidding themselves or trying to kid you.”

The result of all this, if it happens, will be the drop in steel prices which would put pressure on earnings of steel companies.

Preview of Potash (TSE:POT) First Quarter Report

With the global recession skewing a lot of numbers, as comparisons from last year are largely irrelevant as the economic conditions were so bad, everything looks good in comparison. For Potash (TSE:POT)(NYSE:POT), that remains true to, and analysts' expectations are based on guidance given by the company, as there's little else they can go on.

So estimates for the first quarter are earnings will have a range of $1 to $2, with $1.32 being the consensus estimate. Last year during the same quarter Potash generated earnings of $1.02 a share.

The earnings have been revised upwards, as mentioned, based on guidance from the fertilizer company, increasing it from $1.27 last month to the $1.32 average mentioned above.

Guidance range before was $0.70-$1.00, and now stands at $1.30-$1.50.

A couple of things have been attributed to the increased guidance, and that was potash demand has increased in the North American market, and margins for phosphate and nitrogen grew as well.

The quarterly report is scheduled for April 26.

Alcoa (NYSE:AA) CEO Now Chairman As Well

Alcoa (NYSE:AA) Chief Executive Officer Klaus Kleinfeld has expanded his responsiblilities at the company by having the role of chairman added to his workload.

Former chairman Alain Belda is retiring, creating the chairman opening for Alcoa. Belda had worked with Alcoa for over 40 years.

Kleinfeld is also president of Alcoa, which has struggled so far in 2010, with shares down 12 percent so far as aluminum prices remain down.

The replacement of Belda with Kleinfeld was expected, as Belda let it be known in July 2009 he was going to retire this year.

Teck Resources (TSE:TCK-B) Reinstates Dividend Faster Than Expected

You could tell that Teck Resources (NYSE:TCK)(TSE:TCK-B) CEO Don Lindsay really wanted the dividend of the company restored, and he confirms he meant what he said when saying recently it was a "high priority" of the company.

The new dividend will be 20 cents a share on an annual basis, which will cost Teck about $236 million a year.

When Tech Resources last paid a dividend it was for 50 cents a share, which was eliminated in the latter part of 2008 when the company needed to cut costs from the slowing global economy.

JPMorgan (NYSE:JPM), Charles Schwab (NYSE:PSCHW) Fixed Income Deal

JPMorgan (NYSE:JPM) and Charles Schwab (NYSE:PSCHW) have a new deal where Schwab clients have access to all of its fixed-income product line, as investors continue to look for sounder and safer places to put their money.

Included with the deal will be all the research JPMorgan has, and access to corporate debt securities, municipal bonds and nonconvertible preferred securities Morgan has underwritten.

Matt Zames, co-head of global fixed income at JPMorgan in New York, was extremely happy with the deal, saying the bank has been seeking ways to expand its product offerings to individual investors for a long time.

Other products from JPMorgan could be offered to Charles Schwab clients in the future.

BHP Billiton (ASE:BHP) Head Downplays Probe

BHP Billiton (NYSE:BHP) (ASE:BHP) CEO Marius Kloppers said that he's always concerned about anything which could damage the reputation of the company, the current probe of the company concerning corruption isn't that big of a deal or widespread, and shouldn't have much impact going forward.

It seems whatever happened, it was localized in smaller markets, and wasn't connected to any major deals or countries.

Even the fact that it has become public was only because it was revealed in the quarterly report, and that because it was an "exploration issue."

The evidence in the case, which is reported connected to government officials, is being gone over by regulators in the U.S. and Britain. Australia has held back from pursuing the matter at this time, although it has been appraised of the situation by BHP.

Oneok Partners (NYSE:OKS) Expanding Operations in North Dakota

Oneok Partners (NYSE:OKS) announced it'll be developing a new plant in North Dakota, investing over $350 million for the new facility, which will be near its already operating Grasslands processing plant.

Once the plant is operational, estimates are it'll produce about 100 million cubic feet of natural gas a day, which will effectively double the capacity of Oneok at that time.

Gas produced will be shipped via pipelines already in place to Oklahoma.

Still, the company is going commit about $200 million to develop more pipe expansions, connections and upgrades in the state.

All of this is in preparation for the explosion in gas production in the extraordinary Bakken formation.

Thursday, April 22, 2010

Petrobras (NYSE:PBR) Gas, Oil Production Down in March

Petrobras (NYSE:PBR) reported gas and oil production in March was down slightly, with gas and oil production combined reaching 2.556 million barrels of oil equivalent on a daily basis.

In February total gas and oil production for Petrobras was 2.561 barrels of oil equivalent a day, 0.2 percent more than March.

Domestic oil production for March increased to an average of 1.994 million barrels a day, a 0.3 percent gain. In February that came to 1.988 million billions a day for oil.

Internationally, crude oil production fell for the company, as it averaged 149,600 barrels of crude daily, dropping from the 151,400 average in February.

The main reason for the overall decline in March gas and oil production was decreasing demand for natural gas, as Petrobras has lowered its output in response to lower usage.

Natural gas production domestically dropped to 66.7 million cubic meters a day, falling from the 68.1 million cubic meters a day used in February.

EnCana (TSE:ECA) Production Goals Doubled

Even though natural gas prices are depressed at this time, EnCana (TSE:ECA)(NYSE:ECA) Corp. leadership says they're going to continue with their goal of doubling production over the next five years.

CEO Randy Eresman said on the earnings call of the company that even though natural gas prices are below $4 per million BTUs, that won't last forever, and eventually prices will rise again.

"We believe that the current low-price environment is unsustainable," he said. "We expect to see price improvements in the future, but that may take some time to unfold. We'll continue to maintain a longer-term perspective in how we execute our strategy."

Assuming Encana achieves their production goal, they will supply close to 10 percent of all natural gas used in North America at that time.

As far as natural gas prices go, Eresman is right, and eventually they will go up again, and Encana and other smart players in the game should reap solid rewards for some time, along with their shareholders.

Encana is a long-term play though, and needs to be considered that if investing in the company.

Lihir Gold (ASE:LGL) Increases Production Guidance for Rest of Year

While the story of Lihir Gold (ASE:LGL) (Nasdaq:LIHR) recently has all centered around a number of potential suitors wanting to acquire them, they do continue on mining, and although gold production in the first quarter dropped by 26 percent, guidance from the company is over the rest of the year production should increase.

Production in the first quarter for Lihir was 229,757 ounces of gold, down strongly from the 312,311 ounces mined last year in the same quarter.

Guidance for the year increased from 960,000 - 1.06 million ounces to 1 million - 1.1 million ounces.

A number of companies are reportedly still in pursuit of Lihir after they rejected an offer from Newcrest Mining Ltd. (ASE:NCM).

Schlumberger (NYSE:SLB) Declares Dividend Ahead of Earnings Report

Schlumberger LTD (NYSE:SLB) declared a dividend of 21 cents a share, a day ahead of its quarterly report on Friday morning.

Analysts are expecting the largest oilfield services firm in the world to generate a profit of 61 cents a share.

The dividend is payable to shareholders of record on June 2 and will be paid out on July 2, 2010.

Ensco (NYSE:ESV) Increases Dividend, Upgraded

Ensco (NYSE:ESV) reported a strong quarter which easily beat analysts' estimates, while also announcing a nice increase in its quarterly dividend, driving the share price up over 4 percent.

Revenue for the quarter reached $449 million, or $1.11 a share, beating the estimate of $434.89 million, or $1.01 a share analysts were looking for.

S&P Equity Research liked what is sees with Ensco, and raised its rating for the company from "Sell" to "Buy." They said in a note to clients, "We now see an improved outlook for Ensco's key jackup markets, including the U.S. Gulf of Mexico."

Finally, the Board of Directors of Ensco have declared an increase in the quarterly cash dividend on Class A ordinary share from $0.025 an ordinary share to $0.35 per Class A ordinary share. That's $1.40 on an annual basis.

The dividend is payable to owners of Ensco’s American depositary shares as of June 7, 2010, and will receive payment on June 18, 2010. The yield on the dividens is 2.9 percent.

Diamond Offshore Drilling (NYSE:DO) Dividend Lowered

Diamond Offshore Drilling (NYSE:DO) reported earnings today and the results weren't pretty, as net income for the first quarter dropped by 17 percent.

This wasn't unexpected, and in fact beat analysts' estimates, as they were looking for $851 million revenue, with earnings per share of $1.93.

Diamond did better than that, generating revenue of $859.7 million, with earnings of $290.9 million, or $2.09 a share.

Higher costs related to drilling and lower revenue were cited as the reasons for the drop in earnings.

Last year in the same quarter the company had revenue of $348.6 million, or $2.51 a share.

Probably most concerning to shareholders was the drop in a special dividend for its common stock to $1.375 a share, only half of what the special dividend was before.

Other than industry conditions, Diamond said they want to have a stronger cash position in order to take advantage of when opportunities arise to acquire additional rigs.

U.S. Natural Gas Fund (NYSEArca:UNG) Up on Lower Storage Level Growth

The U.S. Natural Gas Fund (NYSEArca:UNG) was up today as a surprise findings of a report from the Energy Information Administration found natural gas storage levels hadn't grown as high as expected, and the natural gas market responded positively to the news, driving prices up.

While this was a nice surprise for investors, it really is only a short-term event, as even after the lower-than-expected storage growth, figures still have natural gas levels up 18.5 percent higher than the five-year average, and up 5.5 percent from last year.

This shows me that once there is a sustainable turnaround in natural gas demand, the market is looking for an excuse to rise, and those companies and funds positioned for it should reward shareholders handsomely, as seen today with the U.S. Natural Gas Fund and others in the industry.

Exxon (NYSE:XOM) Strikes Oil, Natural Gas at Bass Strait

ExxonMobil (NYSE:XOM) has struck oil and natural gas at its Bass Strait site in southeastern Australia, where they are in a joint venture with BHP Billiton (NYSE:BHP).

The well striking oil and gas, located in the prolific Gippsland Basin, hasn't been confirmed as whether or not it's commercial, but if it is like similar wells in the area, it has a strong possibility that it is, although we'll have to wait for confirmation on that.

Exxon and BHP Billiton are 50/50 partners in the venture, with Exxon being the operating partner.

Alcoa (NYSE:AA) Upgraded by HSBC Securities

HSBC Securities upgraded Alcoa (NYSE:AA) from "Underweight" to "Neutral," giving some seemingly positive news to the aluminum industry in general.

More than likely this comes on the heels of the announcement Alcoa has landed a deal worth $11 billion to help Saudi Arabia develop the aluminum sector.

There was also news Alcoa landed a contract with Chevrolet Wheels, although obviously much smaller than the Saudi Arabia contract.

Together it should give Alcoa additional long-term growth which should boost the value of the company and share price. When aluminum prices rise again it will position them for a strong push.

Natural Gas Prices Up on Lower Storage Levels

Investors in natural gas were surprised that storage levels had expanded less than anticipated, sending prices up, settling at $4.128 per 1,000 cubic feet on the New York Mercantile Exchange, an increase of 17.3 cents.

Original estimates by the energy department were natural gas levels were going to reach as high as 80 billion cubic feet, while growing by only 73 billion cubic feet; close to 1.83 trillion cubic feet for the week ending April 16.

Much of the discrepancy came from mild weather which had caused analysts to believe natural gas storage levels would rise higher.

Possible increased usage from the manufacturing sector and natural gas production being less than thought are reasons given for the storage levels being less than estimated.

DryShips (Nasdaq:DRYS) Senior Notes Offering Adjusted

After DryShips (Nasdaq:DRYS) raised the size of its offering for senior notes to $220 million, 47 percent more than before, the price of the stock plummeted.

Selling price for the notes will be 101 percent of their face value plus $4.64 million in accrued interest, say DryShips.

The initial conversion price will be $7.19 a share with an interest rate of 5 percent.

DryShips said the capital will be used to acquire more ships and general purposes of the company.

Some watching the company also believe they could use the capital to pay down some of its bank debt if they can't extend the wavers.

Since the middle of 2008 the share price of DryShips has plunged about 90 percent.

Wednesday, April 21, 2010

Monsanto (NYSE:MON) Prepares for Oral Arguments in Alfalfa Ban Case Before Supreme Court

The ban on Monsanto (NYSE:MON) alfalfa seeds, which has been for three years, is finally about to be heard by the U.S. Supreme Court, and the biotech seed company is preparing for oral arguments after filing their final reply brief with the Court.

Roundup Ready alfalfa has been approved by the U.S. Department of Agriculture and reviewed by the U.S. Food and Drug Administration, and first entered the market in 2005.

The genetically modified alfalfa seed is resistant to Roundup weed killer.

Early in 2010 the Supreme Court said they'll hear the case to determine whether or not to overturn the ban of the alfalfa seed, which has been in force since 2007.

Massey Energy (NYSE:MEE) Taking Charge in Second Quarter on Upper Big Branch Accident

Massey Energy (NYSE:MEE) said in the second quarter the company will take a charge from the explosion at its Upper Big Branch mine which killed 29 workers.

With metallurgical coal being a prime product and the loss of production at the Upper Big Branch mine, Chief Executive Officer Don Blankenship said they'll make up for that by increasing production at all operating metallurgical coal mines by increasing the work week to six days and adding adding three continuous miner sections at Elk Run mines, which is close to Upper Big Branch.

"Financial results for the second quarter 2010 will include a charge related to the tragic accident at the Upper Big Branch mine," said Blankenship.

"While Massey anticipates further analysis will be required, the company estimates the range of loss to be $80 million to $150 million for charges related to the benefits being provided to the families of the fallen miners, costs associated with the rescue and recovery efforts, insurance deductibles, possible legal and other contingencies."

First quarter results exceeded analysts expectations, as net income was $33.6 million, or 39 cents a share, whereas analysts had been looking for 27 cents a share. Last year during the same quarter net income was $43.4 million, or 51 cents a share.

International Tower Hill Mines (AMEX:THM) Continues Strong

International Tower Hill Mines (AMEX:THM) has been a solid performer among gold mining stocks while the gold correction was going on, and that speaks well for the company.

It's possible International Tower will reach a low that is higher than in the past, and from there find a much higher high than it has in its relatively short history.

The range over the last twelve months has been from $2.35 to $8.08, and has been moving sideways so far in 2010, and could be ready to go up in price and break through the $8.00 barrier on a consistent basis.

This is a gold mining stock worth taking a look at and watching closely. A significant dip of any kind could be a strong buying opportunity.

Allied Nevada Gold's (AMEX:ANV) Great Performance

Over the last year and a half, Allied Nevada Gold (AMEX:ANV) has been one of the stronger performing mining companies, continuing to move up on a nice stair-step pattern during that period of time.

For the last 52 weeks, they've continued to do the same, moving from a a range of $5.29 to $17.16.

Obviously tied into the performance of gold, Allied Nevada Gold will move in accordance with gold prices, and that bodes well for the company and its investors, as it will probably move to more all-time highs in the near future (share price), as gold continues to be the preferred place of safety for investors, and ongoing uncertainty in the markets along with inflation worries should keep gold prices up for some time.

It has yet to be proven how gold prices will respond to interest rate hikes, but that shouldn't be for some time, and with the decoupling from the U.S. dollar recently, it may have far less impact on gold prices than in the past, and gold miners like Allied Nevada Gold.

Copper Imports Rise 53 Percent in China from February to March

Copper demand continues to be strong from China, as imports from February to March surged 53 percent, adding continual support to copper prices.

Even with China attempting to slow down its continually hot economy, that doesn't seem to be having much impact on precious metals, and copper in particular.

But if China does slow things down by a percentage or so, that won't do a lot to alleviate the demand for copper in the country, and copper prices will respond accordingly.

Infrastructure expenditure and increasing demand from the growing Chinese middle class just about guarantees this isn't going to end any time soon, and copper companies should ride this wave to strong earnings for at least a couple of years, and including copper price corrections, will probably continue for another decade or so.

Rio Tinto Alcan (NYSE:RTP) Algeria Aluminum Plant

Rio Tinto Alcan (NYSE:RTP) has confirmed it is in negotiations with the Algerian government to construct an aluminum plant in the country.

Spokesman for Rio Tinto Alcan, Stefano Bertolli, said the division of Rio Tinto is in the early stages of looking into the potential opportunity.

Much of the impetus behind the project would be in connection to lower operational costs, as natural gas prices in the Middle East is cheap.

Normally a new aluminum plant would produce about 460,000 tons annually, and in the second stage increase to about double that.

Rio Tinto Alcan opened an aluminum plant in Oman in 2009, which produces 360,00o tons a year and which they have a 20 percent stake in.

Rusal Supplying Aluminum to Banks

United Co. Rusal has said it is in talks with a number of banks to possibly make deals to supply aluminum to banks to back up exchange-traded funds with the metal.

Rusal’s deputy chief executive officer and head of capital markets, Oleg Mukhamedshin, said this is part of the strategy of the company to diversify its channels and generate more demand for alumininum.

Several aluminum ETFs are prepared to be offered to shareholders in the technical sense, but banks have to enter into a negotiation process to guarantee supplies from a variety of aluminum producers, including rivals of Rusal like Alcoa (NYSE:AA) and Rio Tinto (LSE:RIO).

With the supply of aluminum at a challenging place, expectations are aluminum ETFs won't appear on any “significant scale” until the fourth quarter.

Freeport-McMoRan (NYSE:FCX): Copper Demand Rising

Freeport-McMoRan (NYSE:FCX) Chief Executive Officer Richard Adkerson said global demand for copper is rising, and investors seem to agree, as the price of copper has risen for two days in a row on the growing demand.

Adkerson reiterated that the emerging middle class in China with more income will drive the use of copper, and the result has been an increase in copper prices over the last year of 71 percent.

With concerns over the hot Chinese market moving officials in the country to cool of the economy and housing market, some think copper demand could be cut back in response to those decisions, but it'll depend more on Chinese consumers as to whether that will be the case.

Momentum in China alone seems to guarantee copper prices will be strong in 2010, but if major changes do cool of China, then everyone will have to re-evaluate where prices will go if demand falters.

On a conference call concerning quarterly results, Adkerson added that products the company sells seem to be improving in developing countries, which could result in increasing mine output in response.

Copper Prices

Freeport-McMoRan (NYSE:FCX) Beats Estimates

Freeport-McMoRan (NYSE:FCX) exceeded expectations for the quarter, as net income grew to $897 million, or $2 a share. Analysts had been looking for $1.91 a share.

In the same quarter last year Freeport generated $43 million, or 11 cents a share.

Overall revenue surged to $4.36 billion from $2.60 billion last year, a little less than the $4.49 billion analysts expected.

Most of this came about from the increase in copper prices over the quarter, which almost doubled from last year, growing from $1.72 to $3.42. Gold prices were up from $904 an ounce to $1,110 an ounce, while molybdenum increased from $11.52 a pound to $15.09 a pound, all adding to the performance of the company.

The board of Freeport also gave shareholders a nice surprise, doubling the dividend of the common stock from 60 cents a share to $1.20 a share on an annual basis.

Transocean (NYSE:RIG) Oil Rig Explosion - 11 Still Missing

Update: Search for 11 missing workers stopped

As of this writing, at least 11 workers at a oil rig off the Louisiana coast run by Transocean (NYSE:RIG) and contracted out to BP PLC (NYSE:BP) are missing after an explosion rocked the oil platform.

There were 126 workers at the oil rig when the explosion occurred, most of which escaped the blast, which happened at about 10 p.m. Tuesday night.

Of those accounted for, seven of them have been critically injured according to Cost Guard reports. Boats and helicopters have been scouring the area for any signs of potential survivors who are still missing.

Reports the missing workers escaped on a lifeboat which drifted away while the rescue was going on makes hopes high that they'll be found and recovered.

The oil platform, named Deepwater Horizon, was what is called a semisubmersible, which means it floats and is held in place by small thrusters.

Transocean was responsible for the safety of the rig, which was approximately 50 miles southeast of Venice on Louisiana's tip.

Tuesday, April 20, 2010

George Soros' Gold Bubble Stupidity

Earlier in the year George Soros made the ridiculous comment that gold was in a bubble, but not only that, it was "the ultimate bubble," said Soros.

Of course he's been proven to be completely wrong, as the fading former investing star obviously was playing investors in an attempt to influence gold on his behalf, as he had invested millions in gold companies not too long before he made the statement.

It's quite possible he had shorted the position and was hoping investors would flee gold and prices would plunge. He could make a ton of money that way, or he may have been trying to get people to sell their positions in gold mining companies and then buy up a bunch of shares at depressed prices.

Either way, it didn't work, and gold continues to have support, and there's little in the near future that will change that, and in the long term it seems that will be the case as well.

Of course when interest rates are ultimately raised, we'll see at that time how far gold has decoupled from the U.S. dollar and if it's standing on its own in a way it hasn't for a long time.

There are so many variables at this time, it's impossible to see very clearly, even in the short term, and with the U.S. government, and other governments around the world, interfering and influencing markets in major ways, it's hard to tell what they may do to upset things, as it's usually something stupid with the normal unintended consequences.

Even if there is a major gold correction, I don't think we'll be seeing it fall far below $1,000 an ounce any time soon, and even if it does, the economic climate we live in and the inevitable economic challenges we're going to continue to face in the near future, gold will remain one of the few safe places people will run to, and that isn't even bringing inflation into the picture, which is happening in a number of sectors already, such as iron ore and copper prices.

Teck Resources (NYSE:TCK) Profits Surge

Teck Resources (NYSE:TCK) enjoyed fantastic earnings as first-quarter profits exploded by over three times what they did last year at the same time, as an increase in copper prices drove the earnings of the company up.

Net revenue at the company grew by C$908 million ($909.7 million), or C$1.53 a share from C$241 million, or 50 cents, last year. Overall sales increased to C$1.9 billion, or 14 percent.

After one-time charges, earnings were 35 cents a share, down from the analysts expectations of 49 cents a share.

The company earnings grew with the price of copper as mentioned, as copper prices on average on the London Metal Exchange doubled to $7,273.56 a metric ton, based largely on the increasing demand from China, whose economy grew at a hefty 11.9 percent rate in the same quarter.

Don Lindsay, President and CEO said in a statement today, “Our operating results reflect strong copper prices, but do not yet reflect the substantial increases in steel-making coal prices that have been negotiated.”

While most people think of Teck primarily as a copper-producing company, after the acquisition of Fording Canadian Coal Trust, which produces metallurgical coal for steel producers, coal now accounts for 46 percent of the C$7.67 billion of 2009 revenue for the company.

Assuming Lindsay's assertion is correct about coal not being factored into the earnings, we could see some great upside for Teck over the next couple of years.

Yamana (TSE:YRI), Barrick (TSE:ABX), Gold Prices Up

Yamana, Barrick and others go up with spot gold prices

Gold prices had a slight rebound today, and gold mining stocks responding by increasing as well, with gold producers like Yamana (TSE:YRI) (NYSE:AUY), Barrick Gold (TSE:ABX) (NYSE:ABX), Kinross Gold (TSE:K) (NYSE:KGC) and Jaguar Mining (NYSE:JAG) moving up on the day, depending on what stock exchange they were listed on.

Some pulled back while others continue to go up, even in after-hours trading.

After a surge which brought spot gold prices up to $1,147 an ounce, they've pulled back to around $1,140 an ounce, but still a lot higher than the gold lows experienced last week.

Potash (NYSE:POT), Agrium (NYSE:AGU) Buying Opportunity

Potash, Agrium, other Fertilizer Companies a Buying Opportunity

Fertilizer giants Potash (NYSE:POT) and Agrium (NYSE:AGU) bot advanced strongly today as investors viewed the recent drop in share price as a buying opportunity, as fertilizer prices are expected to increase seasonally as spring demand soars.

Now that the share price of the companies are down, most investors and analysts consider them a buy, in contrast to being overpriced, as thought recently.

Mark Gulley, analyst for Soleil Securities Corp., recently raised his rating on Potash from "sell" to "hold."

Other analysts have encouraged investors to look closely at the fertilizer sector for buying opportunities in light of the recent weakness in share price.

Freeport-McMoRan (NYSE:FCX) Quarterly Preview

Freeport-McMoRan (NYSE:FCX) is scheduled to release its quarterly results on Wednesday before the opening bell, and strong Chinese demand is expected to propel the earnings for the company to an estimated $1.91 a share on revenue of $4.5 billion.

Even with the projected lower production levels, that shouldn't hurt the company for the quarter, as increased gold and copper prices during that time should more than offset that.

Most of the increased production costs have come from lower quality grades up ore, and nothing seen in poor management of operations.

Domestic and mature economies aren't expected to help the company much going forward, and China, and to a lesser degree, other emerging markets, will be the main driver of revenue and profits for some years, as the economies of mature countries will take years to recover.

Freeport-McMoRan won't be hard to figure out for some time, as all you have to do is primarily watch demand from China for copper, and to a lesser degree the other emerging markets they serve in a significant way, specifically as they relate to copper demand.

This isn't to completely remove the U.S. economy out of the picture, but that will take time to generate strong demand, although watching the housing and construction market is something that should be part of the tracking of the performance of Freeport-McMoRan.

Another operational cost which needs to be followed is energy costs, which will be higher for the quarter, but again, the higher prices of copper and gold should overcome that with no problem, but it will have to also be watched in the quarterly performances of the company.

Lihir Gold (ASE:LGL) Bidding War About to Start?

There's no doubt Lihir Gold has positioned itself strongly as a takeover target, and after they rebuffed the offer from Newcrest Mining (ASE:NCM), growing interest from major gold mining companies seems to have created the atmosphere for a robust bidding war which will make the shareholders of Lihir Gold very happy once it's over and a winner emerges.

The longer this plays out, the more names of major gold production companies are being thrown about as to having an interest in Lihir.

Major gold companies like Goldcorp (TSE:G), AngloGold Ashanti (NYSE: AU), Kinross Gold(TSE:K), Newmont Mining (NYSE:NEM) and Barrick Gold (TSE:ABX) have all been mentioned as potential suitors of the company, and indeed have had talks of some sort with Lihir over the possibility of acquiring them.

Now the problem for these companies is they are going to have to pay a hefty premium, as there is no hiding the interest in Lihir, and their significant reserves offer a great boost to whoever buys them, although it's not going to be cheap.

A recent report stated Lihir should gold production at Lihir should increase to 1.5 million ounces as of 2016, not a insignificant amount by any measure.

AK Steel (NYSE:AKS) Iron Ore Price Warning

After a warning from AK Steel (NYSE:AKS) on the potential negative impact of iron ore prices on their second-quarter resulst, the shares quickly dropped 6 percent on the guidance.

AK Steel qualified the statement by saying they're referring to if the price of iron ore exceeds the current 30 percent iron ore price increase assumed by the company.

Much of this stems from a global iron ore price not being set at this time for 2010, and until that happens, there is no way of knowing what the earnings of the company will be for the quarter.

“While AK Steel only buys a small amount of their iron priced to global, there is a formula for the rest that is loosely based on the global price,” said Michelle Applebaum, head of a steel-research firm in Highland Park, Illinois.”

This is typical of how this earnings season is going, as investors are looking at guidance more than the numbers reported because of the terrible year last year, which in many cases can make the results appear better than they really are when contrasted with the year before.

So even though AK Steel improved from their $73.4 million loss from last year during the same quarter, posting earnings of $1.9 million or 2 cents a share, over the loss of 67 cents a share last year, investors want to know what the company sees going forward, and what they see doesn't inspire a lot of confidence at this point, although it still has to play out before we know for sure.

Weatherford International (NYSE:WFT) Blames Losses on Charges

In reporting a loss for the first quarter, Weatherford International (NYSE:WFT) blamed the losses on charges related to currencies, especially the devaluation by Venezuela of their currency.

Even so, after all the charges, Weatherford still fell short of analysts' expectations, as profits plunged even after removing the charges from the equation.

Much of that is attributed to the increased cost of doing business.

Excluding charges, earnings dropped from 27 cents a share last year during the same quarter to 6 cents a share the latest quarter. Overall losses came in at $40 million, or 5 cents a share, in contrast to profits last year of $164.8 million, or 23 cents a share; a disaster whatever way they want to spin it.

Revenue for the quarter grew to $2.34 billion, a 4 percent gain, while analysts had looked for revenue of $2.54 billion and earnings of 9 cents a share.

Most of the reason for the drop in earnings is from the weak Latin American market, which has been the main growth engine of the company. Earnings in that region plummeted by 66 percent, much of that from the decline in drilling in Mexico.

Monday, April 19, 2010

Freeport-McMoran (NYSE:FCX) Profits to Rise

Even with the pressure of increased input costs, Freeport-McMoran (NYSE:FCX) is expected to generate about $1.91 earnings per share for the first quarter. The earnings report is scheduled for Wednesday morning.

Freeport-McMoran is positioned about as strongly as any mining company, and when considering production costs and scale, will continue to be among the industry leaders.

Part of the reason for the optimism concerning the company is the rise in price of copper and gold, which should counter the rise in production costs.

With both metals expected to continue to rise in price over the long term, Freeport-McMoran should be among the top mining companies for revenue and profits years ahead.

Freeport-McMoran owns the largest gold mine in the world and the third largest copper mine, both represented by the Grasberg mine in Indonesia.

US Steel (NYSE:X) Promotes Marc Stoken to General Manager Raw Materials

US Steel (NYSE:X) announced it named Marc Stoken as general manager of raw materials for the company.

The position of general manager in the unit includes managing the North american operations of U.S. Steel for purchasing raw materials for the company in the region.

Stoker had been manager of strategic materials for U.S. Steel since 2004. He's been with the company for 34 years.

PetroBakken Energy (TSE:PBN) Paying April Dividend

PetroBakken Energy April Dividend

PetroBakken Energy (TSE:PBN), a subsidiary of Petrobank Energy and Resources Ltd., which has a 58 percent stake in the company, announced they'll be paying out a dividend for April for shareholders of record on April 30.

The dividend from PetroBakken will be $0.08 a share.

PetroBakken Energy April Dividend

Imperial Oil (TSE:IMO): Low Margins Expected

Margins at Imperial Oil (TSE:IMO) are expected to push down earnings, as the company prepares to release its latest quarterly report on April 29.

Those oil companies with strong investment in the downstream are expected to have low margins at their refining businesses, which is sure to result in lower earnings.

Imperial Oil, whose largest shareholder is ExxonMobil (NYSE:XOM), and which has controlling interest in the company, has also said they have started their maintanance at the Strathcona refinery in Edmonton, Alberta, which shouldn't cause any supply problems with the usual 187,000 barrels a day processed there.

The shutdown is expected to last into May.

Suncor Energy (TSE:SU) Ebla Project Producing Natural Gas Now

Suncor Energy (TSE:SU) announced it is now producing natural gas at its Syria-based Ebla project.

The Ebla project came with its acquisition of Petro-Canada last year, and the natural gas produced is being sold back into the Syrian marketplace.

An estimated 500 billion cubic feet of gas reserves are exist in the roughly 300,000 acres of land included with the project.

Production levels are expected to average close to 80 million cubic feet a day.

Suncor has partnered with General Petroleum Corp. of Syria with the Ebla property.

EnCana (TSE:ECA) Wishing it Kept Oil Assets?

When EnCana (TSE:ECA) spun off its oil assets last year into a new company named Cenovus Energy (TSE:CVE), it seemed a good move in light of the possibilities natural gas seemed to offer, they may have regrets now as many natural gas companies are adding oil assets to combat what could be an oversupply of natural gas for years head.

Of course the diffentiator for EnCana was its focus on unconventional natural gas, which should give it a cost advantage over its competitors, and hopefully increase revenue, and ultimately profits as a result.

The emerging shale gas play has been somewhat disruptive to that strategy, as the amount of shale gas in the U.S. is so high, it has put downward pressure on natural gas prices, and could for years to come.

Having said that, I do think natural gas will move up in price, even with the large supply. What has been priced into natural gas has been the large quantity available in the market which investors are starting to understand.

Once that is priced in completely, which it may be close to becoming, it seems over time that will change, and natural gas prices will start to edge up along with the share price of the natural gas companies like EnCana.

Long-term, natural gas should be a good play, based on the low cost of entry at this time. The only place it seems it can go is up.

Capstone Mining (TSE:CS) Downgraded to "Hold"

Capstone Mining Corp. (TSE:CS) was recently downgraded to "hold" from "buy" by Toronto-Dominion Bank, as the company appears it is going to struggle for a period of time.

The company produces silver, copper and zinc at mining projects located in Mexico.

Capstone partner Northern Tiger Resources also announced it will be offering a non-brokered private placement.

They said this in a press release:

"Northern Tiger Resources Inc. is a Canadian-based resource exploration company focused on gold and copper exploration in the Yukon. Through its Dawson Range exploration alliance with Capstone Mining Corp.’s wholly owned subsidiary, Minto Explorations Ltd., Northern Tiger benefits from a wide range of experience, knowledge and capabilities from early exploration to mine production."

Northern Tiger is looking for about $2,500,000 from the placement.

BlackPearl Resources (TSE:PXX) Selling 9 Million Shares

Oil and gas exploration company BlackPearl Resources (TSE:PXX) announced it has plans to sell 9 million shares of commond shares of stock at C$2.90 each.

BlackPearl is looking to raise C$26.1 million from the offering.

The purpose of the selling of common shares in the company is to replenish capital spent when they acquired a larger working interest in its Blackrod SAGD project.

Other than general purposes, capital raised will also be directed toward its operations at Onion Lake, and to a lesser degree other projects of interest.

Jim Rogers: Market Correction Coming

In a recent CNBC interview, investor Jim Rogers said the markets are due for a correction, and almost anything could be a catalyst for that happening, such as the recent charge of fraud by the SEC toward Goldman Sachs (NYSE:GS).

That is largely irrelevant said Rogers, who added while it could be something that triggers the correction, it would never be the cause of it, or anything else similar to that.

The reason the market is going to correct is no other reason than the speed and height at which it has soared, which Rogers thinks could result in correction of about 15 to 20 percent.

Essentially what Rogers is saying is the market is looking for any excuse for a correction, and when it comes it will drive down the stock market to levels it really should be at.

One suggestion Rogers reiterates is the need for investors to start thinking in terms of adding shorts to their portfolio, especially targeting indexes.

He also said some of the bank stocks are ripe to be hammered, as a number of them have been driven up for no discernable reason.

As always, Rogers said investors should continually be on the lookout for buying opportunities in gold.

Sunday, April 18, 2010

Potash (TSE:POT), Mosaic (NYSE:MOS) Price Challenge

Potash and Mosaic struggling with flat potash prices

It's not too often when potash inventories decline and the prices fall with them, but that's been the case, and consequently Potash (TSE:POT) and Mosaic (NYSE:MOS) will struggle in the short term as demand is down, which is ultimately what has driven prices south.

This is no different than gasoline, which can have similar inventory movements at times when demand is down, and prices fall as well.

With little hope of anything in the market happening to give potash prices a boost, both Mosaic and Potash were downgraded by Goldman Sachs (NYSE:GS) recently.

Prices for potash have been level at approximately $350 a ton, about 21 percent below the five-year average.

Expectations are orders from the South American market in the summer months may help the fertilizer generate some momentum.

Constellation Energy (NYSE:CEG) Earnings Should Jump

Constellation Energy Earnings Estimate

In a couple of weeks Constellation Energy (NYSE:CEG) will release it quarterly report, and revenue should stay flat, but earnings per share should increase for the quarter.

Last year for the same quarter Constellation generated $4.3 billion in revenue, with the same numbers expected to be posted this quarter. Earnings per share last year came to $0.75 a share, while this year they are expected to have a nice jump to $1.01 a share.

On an annual basis, earnings per share is expected to come in at about $3.26 a share, according to analysts.

The earnings report for is Constellation Energy is scheduled for $3.26.

Whiting USA Trust I (NYSE:WHX) 13 Percent Yield

Whiting USA Trust I (NYSE:WHX), a spinoff of Whiting Petroleum Corp (NYSE:WLL), is a little-known small-cap energy company which generates huge yields for shareholders, now standing at 13.2 percent.

Most revenue of the trust is generated from the sale and production of natural gas and oil from the properties it owns, with 90 percent of revenue driven by that business model.

Even better news, with natural gas prices under heavy downward pressure because of enormous amount of reserves and new ways to tap into shale gas much more inexpensively, the oil reserves are higher, with approximately 56 percent represented, and 44 percent of reserves are held in natural gas.

The royalties received by Whiting USA Trust are distributed on a quarterly basis to shareholders. Over the last four quarters distributions reached $2.55, a trailing yield of 13.2 percent.

Understand that this is a trust which owns depleting assets, and will be terminated once 9.11 million barrels of oil equivalent have been produced. The estimated reserve balance is at 6.0 MMBOE, and is expected to last through 2017, with a depletion rate of 14.6 percent from 2010 through 2017.

Everything with this company is connected to where the price of gas and oil will go from here. With natural gas prices down low, and oil poised to go up in price, this could be a great play for several years, as the company will almost assuredly increase distributions going forward.

BRICs Continue Local Currency Pursuit

A growing number of nations are losing confidence in the U.S. dollar, as the endless printing of paper money has increased the pace of the drop in value of the dollar, and its desirability as a currency to do business in, as it's becoming questionable as to its long-term viability on a number of fronts; including whether countries want to continue to acquire the increasingly risky Treasuries, which have propped up the U.S. economy for a long time.

Although it's not the first time BRIC countries have let it be known they are looking for ways to conduct business in their own currencies, the fact that they're continuing to talk and pursue it shows it's not an issue that is going away, and also points to the probable removal of the U.S. dollar in the future as the currency to be traded in, to be replaced by the renminbi or yuan.

China already allows some business to be conducted on a regional basis in its own currency, and that is an experiment to see the potential of expanding to do business in foreign currencies besides the U.S. dollar.

The other thing on the positive side, is it seems to show not only a desire to do business beyond the U.S. dollar, but also that the countries are increasingly confident in the currencies of each country.

Saturday, April 17, 2010

Terrane Metals (CDNX:TRX.V) Raises C$100 Million

Terrane Metals (CDNX:TRX.V) reported Friday that they've closed two financings which raised C$100-million for them.

Goldcorp (TSE:G) had a private placement worth C$30-million, while Terrane raised the other C$70-million financing via a non-brokered bought deal. Goldcorp is the largest shareholder in the company.

Terrane said they'll use the funds at its flagship Mount Milligan gold/copper project, which is scheduled for construction in 2010.

There are about 6 million ounces in gold reserves at their flagship mine, and an estimated 2.2 billion pounds of copper reserves.

MAG Silver (AMEX:MVG) Has Great Potential Gains

MAG Silver has a lot of potential

When measured by competitors in the Precious Metals & Minerals industry, MAG Silver (AMEX:MVG) is the leading company as far as possible upside gains going forward.

Thats what the consensus is among analysts, who have an average price target of $12.24 a share, a huge 62.3 percent upswing if they reach it.

The last closing price of MAG Silver was $7.51.

Teck Resources (NYSE:TCK) Upgraded by Standard & Poor's Ratings Services

The long term corporate credit rating of Teck Resources (TSE:TCK-B) got a boost as Standard & Poor's Ratings Services increased their investment grade rating from BB+ to BBB.

S&P analyst Maude Tremblay gave this as the reason: "We base our upgrade on our view that, following the recent debt reduction initiatives, Teck has improved its financial risk profile to a level commensurate with an investment-grade rating and that its better-than-average cost profile will enable it to maintain intermediate credit metrics in the medium term, using our credit neutral price assumptions for base metals."

This will help Tech Resources in costs, as it should lowering borrowing rates, which will help them as long as they maintain the rating.

Adaro (JK:ADRO) Coal Railway Deal

Indonesian Coal Railway

The largest coal producer in Indonesia, PT Adaro Energy Tbk (JK:ADRO), will make a bid for a tender for a $1.5 billion railway project which will allow coal to be transported in Kalimantan.

The coal railway would be 115 miles long and connect Puruk Cahu to Bangkuang in Central Kalimantan.

There are approximately 4.8 billion tons of coal reserves in the central part of Kalimantan, and this will be the first of four proposed railway projects ultimately expected to be a length of 1,136 miles, linking ports with coal mines.

Others interested in investing in the coal railway are Itochu Corp and China Harbour Engineering Co.

Russia May Discount Ukraine Gas Sales

Russia, Ukraine Gas Sales

Russia is thinking about offering a discount in their gas sales to Ukraine in return for being allowed to participate in the energy sector of the country.

"One of the question we are indeed discussing is a price discount. The Ukranian side proposes an exchange. We have many interests particularly in the energy sector - in particular hydrogeneration, nuclear industry and many others," Prime Minister Igor Sechin said.

Russia has been scrambling to open up new avenues for business, as the economic crisis hit them hard, but also concerns over the stability of the country as it relates to consistency in doing business there, has weighed on companies for some time.

Box-office Futures Market Approved

The U.S. Commodity Futures Trading Commission approved the idea of creating a futures market for the purpose of trading in forecast box-office receipts.

Dubbed the Trend Exchange, it would empower traders and those in the industry to make bets on whether the projected revenue of a movie would reach its estimates.

Veriana Ventures, which has been behind the push to approve of Trend Exchange, says it would be a valuable tool to allow those financing films to hedge their bets and protect themselves; they pointed out it would particularly help smaller studios who struggle to obtain financing.

There is another proposal out there from Cantor Fitzgerald LP for a similar exchange which would be named Cantor Exchange if approved. This would target those wanting to invest from the general public, as there would be lower investment requirements accompanying it. A ruling on that should come next week.

Hollywood is opposing the exchanges, saying they could easily be manipulated.

CF Industries Holdings (NYSE:CF), Terra Industries (NYSE:TRA), Married at Last

CF Industries Holdings Merges with Terra Industries

After acquiring over 90 percent of Terra Industries (NYSE:TRA), CF Industries Holdings (NYSE:CF) and them will become the second-largest manufacturer of nitrogen fertilizer in the world.

The 90 percent acquisition allows the deal to go through without the approval of shareholders of Terra.

Agrium Inc. (NYSE:AGU) had battled CF Industries for Terra before dropping the $5.43 billion bid.

Shareholders of Terra will get 0.0953 of a share of CF Industries common stock for each share they own of Terra, along with $37.15 in cash a a share.

In a statement, president and CEO of CF Industries, Stephen Wilson said, "A combined CF Industries and Terra creates a strong leader in the global fertilizer industry with superior assets that will generate long-term value for stockholders, provide more benefits to customers and offer increased opportunities to employees."

Vale (NYSE:VALE), Rio Tinto (NYSE:RTP), BHP Billiton (NYSE:BHP), Under Investigation by Chinese

Vale, Rio Tinto, BHP Billiton and China

The Chinese have stated they are undertaking an investigation into iron ore giants Vale (NYSE:VALE), Rio Tinto (NYSE:RTP) and BHP Billiton (NYSE:BHP) over the possibility they have illegally worked together as a monopoly to manipulate iron ore prices to their advantage.

China has fought hard to use its status as the largest importer of iron ore to negotiate better prices for themselves, but have been resisted strongly by the three leading iron ore producers.

This latest move seems to be a tool being used by the Chinese to influence the process and hopefully get the mining companies to capitulate.

BHP Billiton (ASE:BHP), Rio Tinto (ASE:RIO) Joint Venture Timeline Extended

BHP Billiton and Rio Tinto iron ore joint venture

BHP Billiton (ASE:BHP) and Rio Tinto (ASE:RIO) had their timeline extended by the Australian Competition and Consumer Commission in order to give the two companies more time to respond to concerns over the joint venture between the two companies, which has brought concerns over a potential monopoly.

The joint venture would involve iron ore production, which is in high demand at this time, and should be for the foreseeable future.

Even with the potential regulatory hurdles the companies face, there are other challenges, especially the possibility of shareholders of Rio Tinto voting the deal down because it seems to favor BHP Billiton.

Even if those two barriers are crossed, it will be extremely difficult to get past the European Commission, which is considered the largest challenge the deal has before it.

Friday, April 16, 2010

Aura Minerals (TSE:ORA) Gold Production Up

Aura Minerals (TSE:ORA) has been one of the stronger performers of the emerging gold mining companies, and those owning shares in the company have ridden them for a strong 160 percent gain over the last year, and they're poised for a strong year going forward as well.

One of the elements making them a strong company is the increased production, where they're ready to reach their goal of 190,00 ounces of gold for 2010.

They are achieving this through more capital investment and the pending acquisition of two mines.

At its San Andres Mine in Honduras, Aura has increased its gold production in the first quarter to 19,299 ounces, a gain of 32 percent over the year before.

The company is somewhat of a sleeper because most don't know a lot about the assets they control, including the more hidden ones: the Aranzazu Project in Mexico and Serrote Deposit in Brazil, which is located within the Arapiraca Project. Metals combined from both these mines include copper, iron, gold and silver.

If the prices of these metals hold for some time, the revenue and profits from them will make Aura a player among its larger competitors.

Southern Copper (NYSE:SCCO) Tia Maria Mine Project

Southern Copper (NYSE:SCCO) has been struggling to win support for its Tia Maria mine project, as Peruvian farmers and ranchers protested the approval of the mine on fears they'll lose land and water to the mining company.

Ranchers and farmers blocked the major highway in Peru in hopes of derailing a scheduled meeting on April 19 where Southern Copper must hold in order to even be approved for an environmental impact study.

Frustration by the government of Peru was expressed for both sides, as they said a number of the protesters had no intent of working with the mining company, but rather "have a clear agenda ... which is simply to say no to mining."

On the other hand, the government was also disappointed in Southern Copper, saying they could have gained more community support for the project, as other mining companies have navigated the waters and successfully launched mining projects in the country.

Freeport-McMoRan (NYSE:FCX) Earnings Report Wednesday

Freeport-McMoRan (NYSE:FCX) will report its quarterly earnings on Wednesday, April 21 before the market opens.

Analysts expect earnings per share to come in at about $1.92.

Freeport is a huge copper and gold play, and while it is pretty high priced at this time, is expected to perform strong based on valuations of copper and gold.

Even so, Freeport will pretty much fall on the prices of copper, and to a lesser extent gold, and so is vulnerable as well as strong, depending on how those two metals perform.

Demand for both seems to imply Freeport should enjoy some good years ahead, although he may take some time to push through to former $90 a share marks.

Pan American Silver (TSE:PAA) Strike Ends

Pan American Silver Peru Strike Over

After a strike by over one thousand workers at its Huaron silver mine in Peru started on April 10, Pan American Silver (TSE:PAA) had to decide whether to battle the workers or give in to their demands. That has been decided now as the strike has ended.

At issue in the strike was the amount of money paid out in the profit-sharing payment. The workers felt it was less than agreed to, and got more money for their trouble, whether it was true or not.

Pan American said originally that the strike was illegal, which means they must have believed the payment they made to the workers was in line with the contract.

Either way, they decided to pay out what was identified as a special payment of $180 per worker, which sounds like it was a shakedown rather than breaking profit-sharing agreement.

The 'special payment' is coming from a payment from an unidentified third party.

Rio Tinto (NYSE:RTP) Upgraded by Dahlman Rose

Rio Tinto Upgraded by Dahlman Rose

Dahlman Rose announced they had upgraded Rio Tinto (NYSE:RTP), raising their target price from $300 to $340.

While production at the company are in line with estimates, the increased pricing power based on changing to quarterly contracts is the major impetus behind the upgrade.

Dahlman said the increase in iron ore prices will directly affect the earnings at Rio Tinto in 2010 and into the future.

Exxon Mobil's (NYSE:XOM) Record Oil Well

Exxon Mobil (NYSE:XOM) announced it has drilled the longest extended-reach oil well in the world on a fixed offshore platform from a drilling rig.

The rig, located off the coast of California, is over 7,000 feet below sea level, and then extends another 6 miles horizontally.

Located in the Santa Ynex Unit close to Santa Barbara, the area has produced over 450 million barrels of oil since 1981, claims Exxon, and the record drilling will result in an additional 5.8 million barrels of oil.

Exxon has adopted the technology from its need to adapt to conditions in the Sakhlin Island area of Russia, where they had to learn to tap wells deep under the ocean and miles away from the area.

Jim Rogers Likes Natural Gas in the Energy Sector

Jim Rogers on Natural Gas

Jim Rogers was recently talking investing in energy, and stated he's not selling energy at this time, even though it has doubled over the last 12 months.

It seems he's not buying energy, but he said if he was, natural gas would be his choice, as natural gas prices are depressed, while oil has been high for some time.

Rogers said, "If I were buying energy, I would probably buy natural gas rather than oil just because it’s so depressed. I don’t like to buy when things are up. I like to buy things when down, when people are unhappy that’s when I like to buy things."

I think Jim Rogers may be being a little coy here, as I'm sure he's putting some major money into natural gas, which has nowhere to go but up, and with Rogers liking long-term plays, natural gas fits right into that strategy.

Morgan Stanley (NYSE:MS) to Spin Off Japan Commodities Unit

Morgan Stanley Spinning Off Japan Commodity Trading Company

There will be a new commodities trading company operating under the Morgan Stanley (NYSE:MS) umbrella, as Morgan Stanley Japan Securities Co will be spun off on May 1.

Although being spun off, it'll operate as a wholly owned subsidiary of Morgan Stanley.

The purpose of the new unit will be to take care of business of Japanese companies in areas of sales in the manufacturing, shipping and trading sectors.

With commodities expected to continue their bull run based on Chinese demand, the inevitable price movements related to commodities are normally hedged by companies using derivatives trading as their chosen vehicle.

Japanese companies are expected to increase their derivatives trading to hedge commodity price movements, the reason Morgan Stanley is spinning off the company.

Wells Fargo (NYSE:WFC) Downgrades Exelon (NYSE:EXC)

Exelon downgraded by Wells Fargo

Exelon Corporation (NYSE:EXC), a utility services company, was downgraded today from “Market Perform” to “Underperform” by Wells Fargo (NYSE:WFC).

The valuation range of the stock was adjusted downward as well, from $42-44 to $36-38.

Wells Fargo explained the downgrade of Exelon this way, “We do not believe shares adequately reflect the current forward power price outlook and the diminished outlook for near-term passage of carbon regulations. We continue to view EXC’s unregulated nuclear fleet and operational track record favorably versus peers.”

Oil Drops on Goldman Sachs (NYSE:GS) Fraud Charges

Oil falls on news of fraud charges against Goldman Sachs

It seems almost everything responded negatively to the news Goldman Sachs (NYSE:GS) was being charged with fraud by the Securities and Exchange Commission, including crude oil, which dropped by $2.70 to $82.81 a barrel on the NYMEX.

Equities and other commodities fell as well, with gold prices getting hit hard, dropping by over $24 in mid-day trading.

In what appears to be an over-response to the relatively benign situation, it tells me traders know the market is flying way too high, and with commodity prices, for the most part, at very high levels as well, anything that spooks traders and investors seems ready to put heavy downward pressure on the markets.

Investors are getting leery of the optimism being portrayed by the media concerning the markets, and they know much of it is hype and not based on fundamentals, and the market is poised for a heavy correction, as evidenced by the response to something that shouldn't be taken as that big of a deal.

Goldman Sachs (NYSE:GS) News Pushes Gold Down

Goldman Sachs fraud charges puts downward pressure on gold prices

Gold plunged on the news Goldman Sachs (NYSE:GS) was charged with fraud by the Securities and Exchange Commission, causing the metal to fall by over $24 in response to uncertainty on whether any other bad news is coming out of the industry.

Most of this is related to concerns over volatility in the short term, including the ongoing Greece sovereign debt crisis, which continues to weigh on gold investors.

Investors aren't sure how this will all play out, and that is causing the dumping of gold, although it doesn't really make sense to dump the safest asset you can hold in uncertain times.

That means it's really the traders and not the gold investors who are fleeing the gold market, and that'll turn around soon enough once this plays out.

Thursday, April 15, 2010

Taseko Mines (TSE:TKO) Still Soaring

Investors Still Bullish on Taseko Mines

Since January 2009, Taseko Mines (TSE:TKO) has had a continual rise in price, as any graph will show you, as it looks like stair steps when you see it.

Prices for the company have risen in the last year from $1.47 to $6.19, a major move by any measure.

Even since its last quarterly report on March 18, Taseko Mines has surged by over 22 percent, continuing on its upwards trajectory.

Many analysts and investors continue to be bullish on Taseko, and it bears more research and another look as it continues to outperform its competitors and the copper industry in general.

Deutsche (NYSE:DB) Steals Commodity Head from Credit Suisse (NYSE:CS)

Deutsche Bank (NYSE:DB) robbed Gunnar Hoest from Credit Suisse (NYSE:CS) to head up its commodities department, while Credit Swiss then replaced Hoest with Alexander Toone, who will be moved from the London office of the company to its Asian commodity business.

Hoest will start for Deutsche staring in June, also as head of their Asian commodities unit, while Toone heads for the Singapore office to lead the Asia-Pacific commodities business of Credit Suisse.

Hoest is taking the place of Simon Grenfell, who is moving to London to lead metals sales and origination.

Commodities are continuing to be one of the more targeted sectors by large banks, as a number of former revenue streams have been hit by regulation around the world, leaving tighter markets to choose from to generate revenue and profits.

The commodity market is considered one of the more lucrative and desirable sectors at this time, even though prices have reached high levels across the board, with a few exceptions like natural gas and agricultural commodities.

Peabody (NYSE:BTU) Increases Macarthur Coal Bid

American coal company Peabody Energy (NYSE:BTU), has increased its offer for Macarthur Coal by 14 percent, raising it to A$16 a share, up from the most recent A$14 a share bid, and the original A$13 a share bid made by Peabody. That would bring the total offer to A$4.1-billion ($3.8 billion)if it goes forward and is approved.

Peabody is competing with an Australian company, New Hope, for control of Macarthur, and has a leg up on the company at this stage because the board of Macarthur likes their offer far better than the New Hope offer of A$14,5 a share.

Macarthur's board has recommended shareholders reject the New Hope offer as it now stands, possibly paving the way for acceptance of the Peabody offer.

Marcarthur is the leading global exporter of pulverized coal, which is in high demand from China.

OPEC May Increase Production if Oil Prices Go Over $100 a Barrel

OPEC May Increase Oil Production if Prices Go Over $100 a Barrel

OPEC will change its production levels if the price of oil goes above $100 a barrel, said Kuwaiti Oil Minister Sheikh Ahmad Abdullah al-Sabah today.

Even so, Sheikh Ahmad that considerations would have to be taken into account concerning supply and demand when making decisions.

For now, oil prices at about $85 a barrel are considered a good price by OPEC, and that isn't anticipated to change much, although some think it'll go much higher as the summer period comes.

I don't think so though, as the so-called recovery isn't really one, as data continues to come out showing increased loss of jobs and foreclosures.

That will keep oil demand from rising, along with oil prices.

Labor, Housing Data Show Economy Still a Disaster

Data released concerning labor and housing confirm if we're in a recovery, it's now one that's sustainable, as another 24,000 applied for unemployment benefits for the first time and 35 percent more homes were foreclosed upon than in the same quarter last year.

So now we have a so-called jobless and foreclosure recovery.

As far as the jobless claims, every time we hear the numbers now the inclusion by the mainstream media is that it was unexpected. Well how come it's not unexpected to me and others, and I state it before it happens to confirm that.

Either productivity is so high with businesses that it's unprecedented, or the numbers are again being massaged to say what the Obama administration wants them to say.

Foreclosures reflect the weak housing and job market, while the job market reflects the fact that there is little hiring going on, if any at all, other then isolated instances.

I'm not convinced we're even out of a recession, let alone started on the road to recovery. Just because we hear some positive earnings reports doesn't mean a thing in relationship to the state of the U.S. economy, all that means is a lot of company continue to cut costs, not that they're able to raise margins to generate more profits from increased business.

There's nothing unexpected about any of this, and it will continue on for at least a year or more before there is really an turnaround, if it comes at all within that timeframe.

Goldman Sachs (NYSE:GS) Says Canadian Dollar Rising Stronger than Expected

Future of Canadian Dollar

Goldman Sachs (NYSE:GS) raised its outlook for the Canadian dollar, saying over the next year it should be stronger than originally anticipated.

Goldman said the stronger-than-expected economic recovery has a lot to do with their changed outlook, and expect the Bank of Canada to raise interest rates in the third quarter in response.

Although I agree that the Canadian dollar will remain strong in light of the increasing demand for commodities by China and other emerging nations, I do question Goldman Sachs' assertion we're in a stronger recovery than thought, as there's still plenty to suggest if we're in a recovery at all, it's a very weak one.

Mariner Energy (NYSE:ME) Acquired by Apache (NYSE:APA)

Apache buys Mariner Energy

Apache Corp. (NYSE:APA) announced it will acquire Mariner Energy (NYSE:ME) for about $4 billion, including the assumption of $1.8 billion in debt Mariner has.

Terms of the deal are each holder of Mariner Energy stock will receive 0.17043 of a share of Apache common stock and $7.80 in cash for each share, which will be valued at $2.7 billion.

The deal values Mariner at about $26.22 a share, a 45 percent premium over its close on Wednesday.

Apache CEO G. Steven Farris this is a move to expand into the deepwater gulf.

China Platinum Demand Driving Prices Up

Gold is of course grabbing the majority of the headlines lately, and rightly so, but that hasn't kept some of the other precious metals performing strongly so far in 2010, and that includes platinum and palladium, which have outperformed gold by a wide margin so far this year.

Platinum has ralled by 17 percent and palladium has performed even better at 25 percent gains in 2010. On the other hand, gold has been struggling at gains of about five percent.

With the possibility of increased demand in China for platinum and palladium for use in catalytic converters, and what seems to be a growing and new demand in the jewelry sector, there are expectations there will be a shortage of platinum in 2010, in contrast to a surplus last year on lower demand.

China has become the largest car market in the world now, which of course will be the primary driver of platinum and palladium prices, as it is with other raw materials it needs to grow its economy.

Some platinum and palladium companies have been performing strongly recently, as the market attempts to sort out whether or not the seeming growing demand for platinum and palladium is real and sustainable, which means it needs to be seen that China is continuing to grow, especially in the auto sector.

That news has been confirmed as far as pace of growth, now it'll need to be broken down more to find out the details.

Assuming the demand for platinum and palladium from China is real, and it does seem to be, that should continue to push prices up throughout 2010.