Category Archives: CommodityFACT

July 9, 2014

MIFID position limits: size matters

For European regulators, beginning work on a methodology for calculating commodity derivatives position limits must feel like entering a rabbit hole, where each turn leads to more choices and more tunnels, each leading further and further into the depths of the warren. To give that [&hellip…

January 22, 2014

Rain falls, crops increase; prices fall, then what?

For agriculture commodities, droughts mean no water, no crops, and price increases driven by scarcity. That was the scenario in 2012 in the US with drought-ravaged corn production. 2013 was another story.  The Wall Street Journal reported  that thanks to good weather conditions, “production in [&hellip…

November 6, 2013

Denkanstöße (Food for Thought)

October 16 was World Food Day, and it probably won’t come as a shock that a number of activist groups chose the occasion to publicly protest in Frankfurt for their causes. It was, however, a pleasant surprise to see an in-depth and balanced article on the [&hellip…

October 23, 2013

Stabilizing the price at the pump

How commodity derivatives mitigate physical price volatility The average person may not be able to recite the hundreds of economic figures announced daily in newspapers, on TV and online. But there’s one exception to that rule: It seems almost everyone knows how much he has [&hellip…

October 16, 2013

The essential role of banks for physical commodities

A new report reiterates that commodity producers, suppliers and end-users need banks to finance projects and hedge their risks. Meetings between the European Institutions have restarted in Europe about the Markets in Financial Instruments Directive (MiFID) which aims to regulate, among other things, the functioning [&hellip…

August 19, 2013

China’s commodity slowdown chills prices

Renowned economist Daniel Yergin recently had an opinion piece, China’s Big Commodity Chill, in The Wall Street Journal that’s worth a read for anyone who wants to know what really drives price changes. You may know Yergin from his book The Prize: The Epic Quest [&hellip…

July 31, 2013

Banks and commodity activities

A recent article in the Financial Times takes a hard look at some of the issues related to the commodity-related activities of major banks.  The piece is noteworthy for two reasons. First, it finds that there are some significant flaws in arguments used to support [&hellip…

July 23, 2013

Research confirms the fundamental(s) truth

Has “financialization” of commodities put undue pressure on prices? Has the creation of investment products linked to commodities indices made the grocery basket more expensive? A task force from the Centre for European Policy Studies (CEPS) and the European Capital Markets Institute (ECMI) has just [&hellip…

July 1, 2013

Amen to that!

There’s an old saying about how to respond if your industry is under attack from government officials: “When a regulator swings, duck.” But what do you do if it’s the Pope who is taking the swing ‒ which he appeared to be doing in a [&hellip…