Energy & Commodities

Agri-Equities and Agri-Food Prices: Both Strong

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Posted by Ned W. Schmidt

on Monday, 09 January 2017 09:20

When has food been more valuable than technology? Aside from all of history, that was especially true in 2016. Chart below is our Investment Scoreboard for 2016. In it are portrayed the returns for a variety of important market measures. Gold stocks, Silver, oil, and Agri-Equities clearly owned the year. Agri-Equities, number four in chart, substantially outperformed most of the equity markets. In 2016 food was clearly more valuable than those tired, old, over owned technology and internet stocks as indicated by the NASDAQ 100 being far down in the list.

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....read more HERE

....related: Chart: How Every Commodity Performed in 2016


Energy & Commodities

Chart: How Every Commodity Performed in 2016

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Posted by Visual Capitalist

on Friday, 06 January 2017 06:57


2016 Commodity Performance

It was an up and down year for commodities, but things ultimately finished in the black.

The S&P Goldman Sachs Commodity Index (GSCI) climbed 10.1% on the year – it was just enough to edge out the S&P 500, which ended 2016 with a 9.5% return.

Winners in 2016

The biggest winners on the year were base metals and the oil and gas sector.

Here’s how base metals did:

Base MetalQ1Q2Q3Q42016
Iron Ore 37.0% -6.2% 6.3% 31.1% 81.0%
Zinc 20.0% 13.1% -3.2% 26.1% 65.7%
Nickel -3.1% 13.9% 11.9% -5.0% 17.3%
Aluminum 3.8% 7.2% 1.4% 4.0% 17.3%
Copper 0.1% 3.9% -0.5% 13.1% 17.1%

Iron ore and zinc were the best performing commodities on the face of the planet in 2016. Iron finished up 81%, its first calendar gain in four years. Meanwhile, zinc shot up 65.7% on the year as major zinc mines shut down, and supply stockpiles dwindled.

Oil and gas also posted a major comeback in 2016:

Natural gas -17.0% 53.3% -2.7% 28.0% 58.5%
Oil (Brent) 0.6% 35.1% -1.2% 13.6% 52.4%
Oil (WTI) -3.2% 37.3% -2.1% 11.4% 44.9%

It was a volatile year overall, but it appears that the worst of the downturn in energy prices is over.

Losers in 2016

Not all energy-related commodities could be so lucky. 

Uranium continued its epic nosedive, losing -41.6% on the year. U3O8 now trades for $20.25/lb, a tiny fraction of its previous highs of over $100/lb in 2007.

Energy LosersQ1Q2Q3Q42016
Uranium -16.0% -7.4% -12.0% -14.7% -41.6%
Coal 0.5% -9.3% 1.3% 0.0% -7.7%

Coal has also performed abysmally, at least in North America where CAPP prices finished down on the year -7.7%. We previously showed the decline of coal in three charts, and it seems that coal will likely continue to be an unpopular choice for utility companies in the U.S. and Canada. 

That said, it is worth mentioning that Australian coal prices went bonkers earlier this year due to a Chinese administrative oversight.

Courtesy of: Visual Capitalist


Energy & Commodities

Calling Putin's Bluff

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Posted by Keith Kohl - Energy & Capital

on Wednesday, 04 January 2017 09:40

New year, same old market.

Only now we’ve finally got some momentum going in oil. Prices surged above $55 per barrel on the first trading day of the year on news that OPEC had not only agreed to a production output, but was actually going through with it.

If you’ve been watching the market the last few years, you’ll know those are two entirely different things. But the issue has finally come to a head; the group can’t afford to keep suppressing prices as it’s been doing since 2014.

By now I'm sure you've guessed that “the group” mainly means Saudi Arabia. The country’s income is tied a great deal to oil, though it’s working to reduce its reliance on the commodity as much as possible.

And the House of Saud isn’t the only oil royalty suffering at the hands of low prices...

Russia Takes a Hit

Late last year, we saw yet another OPEC meeting come and go, only this time it ended with a real decision: the group called for a global oil production cut.

For the first six months of 2017, 1.2 million barrels per day will be cut from various OPEC members’ production levels, not including Libya and Nigeria, which had already seen production decreases due to unrelated circumstances over the past year.

The vast majority of this is, predictably, coming out of Saudi Arabia’s share, and will still leave the country with production levels above 10 million barrels per day if it cuts from its record December numbers.

But it’s not just OPEC that’s participating in the cut. The group stated that it would only agree if other non-members were to join it in reducing output, and several countries hopped on board.

image-1-putin-eacOne of these was Russia, another top global oil producer. Putin has long been a supporter of a production cut and has been a notable part of many of the past year’s meetings on the subject.

Taking a look at his country’s finances, it’s no wonder why.

Russia’s economy, much like Saudi Arabia’s, is largely tied to oil exports. In 2014, the country’s export revenues amounted to $449 billion. That number dropped 33% to $331.5 billion in 2015.

More than half of the country’s exports are tied to oil, including crude oil and refined petroleum products.

When oil prices were cut to less than half of their 2014 highs, Russia lost a huge chunk of its income all at once. It’s been dealing with the effects of this loss ever since.

In 2015, the country ran on a budget deficit of nearly $25 billion, 2.5% of its GDP.

Even though earlier expectations called for the 2016 deficit to be smaller, the latest numbers are estimating that it grew to between 3.5% and 3.7% of GDP instead.

This was due to one major mathematical flaw:

"Our budget will be balanced when the price is $82 per barrel, so there are still a lot of decisions to be made when it comes to budget policy," said Russian Finance Minister Anton Siluanov in January last year.

With prices bouncing around $40 for most of the year, $82 was really a stretch. Even Business Insider’s recalculation that the country could at least break even at $68 per barrel was a bit much to hope for, considering we’re only just now entering the real recovery.

Will It Cut?



Energy & Commodities

Short Term Update on Miners

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Posted by Gary Savage - Smartmoneytracker

on Wednesday, 04 January 2017 09:13

We have a fairy bullish setup with a weekly swing, right translated weekly cycle and a rally that should persist for a minimum of 5-8 weeks.




Energy & Commodities

Richard Wyckoff: Logic Not Working, This Maybe Why? Part II

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Posted by Readtheticker.com

on Friday, 30 December 2016 08:16

Screen Shot 2016-12-30 at 7.05.34 AMRichard Wyckoff - logic has rules, some folks like the short cuts, hence they wonder why their trade ends in a mess.

Previous Post: Richard Wyckoff logic not working, this maybe why?
Part 1

Investing Quote...

"Without specific, clear, and tested rules, speculators do not have any real chance of success." ~ Jesse Livermore

"If you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks." ~ John (Jack) Bogle

"The stock market is filled with individuals who know the price of everything, but the value of nothing." ~ Philip Fisher

"I buy on the assumption they could close the market the next day and not reopen it for five years" and "Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell." ~ Warren Buffet

"My experience has been that in successful businesses and fund management companies, which performed well over the long-term, some courageous decisions were taken. Courageous fund managers reduce their positions when markets become frothy and accumulate equities when economic and social conditions are dire. They avoid the most popular sectors, which are therefore over-valued, and invest in neglected sectors because being neglected by investors they are by definition inexpensive. The point is that it is very hard and that it takes a lot of courage for a fund manager to avoid the most popular sectors and stocks and to invest in unloved assets. Finally, every investor understands the principle 'buy low and sell high', but when prices are low nobody wants to buy." ~ Marc Faber

More from RTT Tv


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