Posts Tagged ‘Precious metals’

THE CHANGING COLOURS OF COMMODITY EXCHANGES

Trading Hours is basically the hours of a day where trading of a futures contract can take place in an exchange. Again, this varies widely according to the asset being covered. Some commodities futures are traded only a couple of hours a day and some index futures are traded 24 hours a day non-stop.

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With a number of exchanges around the world, trading takes place almost 24 hours a day, except on weekends. There are at least a dozen major exchanges that serve as a marketplace for commodities worldwide. Each of these specializes in certain commodities, while others trade in whole different set.

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Additionally, as the side effect of being such a huge market, the market is extremely liquid and numerous transaction volumes takes place daily.

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Instruments (contracts) traded on commodity exchanges include futures, options and other derivatives. Agricultural products, precious metals, industrial metals, and fossil fuels and other forms of energy are other products are among the primary goods that are traded in these exchanges.

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A concept is emerging for trading in movie futures. Media Derivatives, a division of Veriana Networks, and Cantor are racing to set up the first US exchanges to offer futures on movie box office receipts. They are closing in on their goal of offering hedging — and speculation — instruments to investors and movie studios wary of audience fickleness and box office volatility.

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The basic purpose of commodity futures markets is to allow suppliers/users of the product to sell/buy such contracts, whereby they can “lock in” a future price of the commodity and thereby eliminate the uncertainty and risk of doing business while facing an unknown future price. However, commodity trading has moved to electronic trading from open outcry systems, following the trend in financial securities trading. Electronic trading has been found to affect areas like bid-ask spreads, transaction costs and speed of information dissemination.

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Commodity trading market is a lucrative field for investors. It generally refers to the future market, which empowers the traders investments, needs and can be gainful, expensive and enjoyable.

WEEKLY COMMENTARY

Bulls added more strength to precious metals and base metals while energy and most of the agro commodities back pedaled during the last week. Fear of crisis in Dubai resulted in more capital inflow in precious metals, which resulted in nonstop seven week rally in gold.

It made a high of 18294 and $1226.40 on MCX and COMEX respectively. However, in the later part of the week, we saw a halt in rally and prices corrected marginally on Friday. On Friday, December contract expired on MCX, because of which it traded down. Silver followed the footsteps of gold.

Many base metals made higher trading range last week on improvement of economic releases, except nickel. Lead performed better on technical support. Similar to precious metals, base metals saw profit booking on Friday. Red metal copper fell from its 14 months high.

After the release of U.S. inventory data, which showed crude and gasoline inventories jumped last to last week, crude tumbled down. It breached the mark of $76 per barrel last week. Natural gas also slipped for the same reason of inventory rise amid low demand. Guar pack traded sideways to bearish bias in the week gone by.

Upside movement was capped in prices as investors booked their profits at higher levels. However, slack demand in physical market also added bearish sentiment to the market. In spices pack; pepper, jeera and turmeric along with chilli got hammered and settled in red territory.

Chilli futures settled down for the fourth consecutive week on account of reducing participation in the physical market. Harvesting of fresh produce has already been started and the ongoing dry weather is favorable for the post harvesting activities.

Turmeric prices once again settled down as demand is not picking up and traders are waiting for the arrival of fresh stock which may add bearish momentum to the trend. After witnessing three week rally, pepper prices cooled down in the week gone by on an account of profit taking and continuity of weak export demand.

Jeera futures which got under pinned and gained for seven straight weeks also took a breath of relief and settled down in absence of fresh cues due to closure of major spot market at Unjha for some local festivals.

Lack of buying activity on the futures platform also led to the fall in prices. In oil seeds section; soya bean futures started the week with positive note but later on some profit booking at higher levels pressurized prices to settle near the opening price. Mustard seed futures ended the week on positive note on firm demand in spot market.

Bull Run in Commodities May Continue

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the globe.

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Bull run in commodities may continue


Bull run in commodities may continue:

Spurt in prices to be driven by dollar weakness, rise in demand and low supplies.

The global bull run in commodities is likely to continue through next year due to dollar weakness, supply restraint and, eventually, a pickup in demand.

Crude oil prices are also up 74 per cent, but the energy complex as a whole is down, as natural gas prices are weighed down by massive oversupply.

Precious metals have also risen 37 per cent.

The base metals complex has performed well this year, driven by the rebound in growth in China, although some of the increased demand has gone into inventory.

Sugar and soybeans have been the exception in 2009, rising sharply while the rest of the agricultural complex underperformed.

This was largely on supply issues; improved crops in 2009-10 are expected to flood the market, dampening prices.

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In Other major Commodities Updates we can read about Govt estimation about the Edible oil output which says that Edible oil output may dip 7.4% in 2009-10.

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Edible oil output may dip 7.4% in 2009-10:

The government today said edible oil output is likely to decline 7.4 per cent to 7.96 million tonnes in the 2009-10.

Edible oil production, last year, stood at 8.6 million tonnes.

Oil season runs from November to October.

Production/net availability of edible oil from all domestic sources is estimated to be 7.96 million tonnes in the 2009-10,” Minister of State for Agriculture K V Thomas said.

The demand of edible oil in the country is estimated to have increased to 17.79 million tones this year, he said.

The domestic edible oil production is likely to decline following a dip in oilseeds production, which is estimated to be 15.23 million tonnes in the kharif season against 17.88 million tonnes in the last season, the official data showed.

Thomas said, “There is a wide gap in the production and demand of edible oil in the country and imports are resorted to bridge the gap.”

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