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Tue, Apr. 29, 7:15 PM
- U.S. government forecasters predict a more than 65% chance for an El Niño weather phenomenon by the end of the year, a development that threatens to drive up prices for food and other staples.
- El Niño has a reputation for triggering sharp run-ups for prices in markets as diverse as nickel, coffee and soybeans, and commodities investors, traders and analysts are bracing for impact at a time when global supplies of many raw materials already are stretched.
- Global food prices - which at the start of 2014 were expected to be largely flat this year - could easily climb 15% to record highs in as a little as three months after an El Niño occurs, says World Bank economist James Baffes.
- But Société Générale analysts say it is miners, not farmers, who have the most to worry about; since 1991, nickel prices rose the most (13.9%) during El Niño years among commodities the bank tracks.
- ETFs: DBA, CORN, DBC, JO, JJC, RJA, JJG, WEAT, SOYB, DJP, SGG, DBB, COW, NIB, GSG, RJI, CAFE, BAL, GCC, DAG, USCI, JJA, GRU, CHOC, CANE, JJN, RGRA, AGA, JJT, RGRC, CPER, AGF, GSP, BOM, RJZ, JJU, GSC, LSC, FUD, DJCI, USAG, BOS, SGAR, JJM, DEE, BDD, UCI, LD, WEET, UAG, DYY, DIRT, BCM, CMD, DDP, NINI, JJS, CTNN, TAGS, UBC, CUPM, FOIL, UCD, ADZ, RGRI, LEDD, UBM, CMDT, BDG, SBV, USMI, DPU, LSTK, CSCB, GRWN, HEVY, CSCR
Fri, Mar. 14, 3:48 PM
- US Steel (X -1.3%) is downgraded to Underperform from Neutral at Credit Suisse due to relative valuation and expected lower iron ore pricing in H2 2014.
- Equity prices, and particularly US Steel, seem to be overlooking recent commodity price weakness as a short-term destock related phenomenon - perhaps not surprising given the 2012 collapse and rebound in iron ore prices - but Credit Suisse believes that, unlike 2012, structural changes to the global ferrous supply/demand balance through mid-year will see commodity prices settle at a lower level in H2 than they did after the 2012 destock shock.
- Also, the firm thinks US Steel's relative outperformance vs. international peers including ArcelorMittal (AT) likely is due to EM/DM exposure trade, but the gap will close at some point.
- ETFs: DBC, DJP, GSG, RJI, GCC, USCI, CFD, CTF, RGRC, GSP, GSC, LSC, DEE, DJCI, UCI, CMD, DDP, DYY, BCM, UCD, FTGC, CMDT, SBV, DPU, CSCB, CSCR
Tue, Feb. 4, 10:06 AM
- After losing 10% in 2013 while the MSCI World Index of stocks gained 24%, the Dow Jones-UBS Commodity Index made up some ground in January, eking out a small advance while the MSCI index slid 3.7%.
- But as rallies go, it was a pretty lame one. The DJ-UBS index's biggest weighting is for natural gas at nearly 14.5%, and gas futures surged 18% amid the coldest January in memory. Spring will come soon though, and then what?
- Second in the index weighting is gold which gained 3% in January - not the greatest bounce considering a 29% dive in 2013.
- Commodities tied more closely to global economic activity - oil and industrial metals - make up 42% of the sector's weighting and they were pretty much uniformly in the red.
- Broad commodity ETFs: DBC, DJP, GSG, RJI, GCC, USCI, CFD, CTF, RGRC, GSC, LSC, GSP, DEE, DJCI, DYY, DDP, BCM, CMD, UCI, UCD, CMDT, SBV, DPU, FTGC, CSCB, CSCR
Dec. 31, 2013, 1:21 PM
- Nearly 8 years after the launch of the PowerShares DB Commodity Tracking Fund (DBC), the firm filed paperwork for an actively managed version of the fund, offering exposure to a diversified set of commodities through futures contracts.
- By investing in 14 heavily traded sectors of the commodity market, this fund hopes to hedge against individual sector falls, creating consistent return for investors.
- DBC is down about 7.5% this year as equities stole the spotlight in 2013, but with $5.5 billion in assets under management it has considerable stability and did exceedingly well in years where equities fell.
- Other broad commodity ETFs: DJP, GSG, RJI, GCC, USCI, CFD, CTF, RGRC, GSC, LSC, GSP, DEE, DDP, DYY, DJCI, CMD, BCM, UCI, UCD, SBV, CMDT, DPU, FTGC, CSCR, CSCB
Dec. 27, 2013, 4:29 AM
- The WSJ shines a light onto "shadow warehouses," a hidden system of facilities that store tens of millions of tons of aluminum, copper, nickel and zinc across the globe for banks, hedge funds and commodity merchants.
- The warehouses operate outside the London Metal Exchange's system, are unregulated, and don't provide details of their holdings. As a result, it's unclear how much metal is held in the shadow system. This lack of visibility could cause major price swings.
- The WSJ article follows allegations that warehousing companies have artificially boosted the price of metals, particularly aluminum.
- Companies that operate metals warehouses include Goldman Sachs (GS), Glencore Xstrata (GLCNF) and JPMorgan (JPM), although the latter is looking to sell its commodities unit.
- Relevant tickers include VALE, AA, AWC, KALU, MNSF, CENX, NOR, BHP, RIO, ACH.
- ETFs: DBC, JJC, DBB, DJP, GSG, RJI, GCC, USCI, CFD, JJN, JJT, BOM, RGRC, CPER, CTF, RJZ, GSC, LSC, GSP, JJU, DEE, BDD, BOS, JJM, DYY, DDP, DJCI, LD, CMD, BCM, CUPM, UCI, RGRI, UCD, UBM, FOIL, BDG, LEDD, CMDT, SBV, USMI, DPU, NINI, FTGC, CSCB, CSCR, HEVY
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