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Blog Posts in Commodity Markets

Crude oil now trading in signficant contango

Oil is crashing yet again this morning nearing the $50/barrel mark.  A level that is likely significant for many parties, the least of which is producers seeing their margins crashing even faster.    Derivative securities of CL such as USO, RB and BZ are suffering as well.  While the general sentiment for oil is obviously bearish, there is one critical piece of evidence that is resoundingly bullish.  Crude oil is now trading in significant contango which means contracts expiring further in the future are at a premium to the current expiration.  The FEB '15 CL contract (ticker for West...Read more

Moscow-led trade bloc and the Uranium market

Armenia joined the Russian-led trade bloc that previously included Belarus and Kazakhstan.  While these countries may seem insignficant in most sectors of the worldwide economy, Kazakhstan is actually very signfigant in one small but important market - uranium production.  Nearly 40% of the world's urnamium production now falls under this trade bloc.  Kazakhstan is the world's largest producer at 33% of world output ahead of the likes of Australia and Canada (source: Wikipedia.org).  This gives Russia increased leverage over power production in Western Europe.  If Russia wanted to interupt...Read more

Is the PetroRuble coming?

The crashing Russian Ruble has been the big story line from the past couple of weeks.  From here, there are only two options for the currency.  Continue to crash on its way to zero or breakout out of the parabolic downtrend and rebound.  While the fundamentals of the Russian economy may not be all that tantalizing, I don't see their currency going to zero.  After all, who's economy is doing all that well?  And while Russia's economy has had its bumps and bruises, it has quite a bit going for it.  The government is running surpluses (what a novel idea) and they still produce quite a bit of...Read more

Per capita Soybean inventories at generational lows

This morning bean prices are ticking slightly upward on news inventories are depleting.  How low are bean inventories?  From Bloomberg.com:

U.S. soybean reserves on June 1 were probably 382 million bushels, the smallest for that date since 1977, according to a survey of 26 analysts by Bloomberg News. Area losses for corn and soybeans may reach 2 million acres due to damage from ponding, flooding and hail, Michael Cordonnier, the president of Soybean & Corn Advisor Inc., wrote in a report today.

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Gold going higher?

Obviously, alot rides on the price movement of gold.  And for many investors, so does their long-term financial stability.  For the past 28+ months, gold has been correcting a 11+ year run.  2013 was the first down year for gold since Y2K.

So is the route over?

By all means, it appears so.  Gold, silver and mining stocks appear to have started a bottoming process in June of last year.  In the equity world. six months is a common timeframe for a bottom to be carved out.  It took around six months from Oct 2002 through Mar of 2003 to bottom out over a decade ago and the...Read more

Justification for buying SLV - iShares Silver Trust

By proceeding, I acknowledge that I have read and understood the Disclaimer and Copyright Statements . Dear Clients, In my October Update, I listed three fundamental reasons why I’m emphasizing SLV over GLD. Recently, I came across a fourth reason in an article on savehaven.com called Leveraging Gold with Silver by Roland Watson. In his article Leveraging Gold with Silver , Mr.Read more