Salient to Investors:
- Investors pulled the most money from US ETPs backed by raw materials since April.
- US corn and soybean crops are the biggest ever, global stockpiles of nickel are at an all-time high, the US is producing the most oil since 1986, while China is headed for its slowest expansion in two decades.
- The Bloomberg Commodity Index is set for a fourth straight annual loss, the longest slide since data began in 1991.
- Societe Generale lowered its price forecasts for more than half of the 43 raw materials it tracks, and recommended shorting gold on rising US interest rates and a rising dollar, target below $1,000 over the medium-term.
- Citigroup pared its outlook on crude oil, gold, corn and wheat.
- Goldman Sachs still expects losses in copper and gold.
- In August, Citigroup forecast the Arabica-coffee crop shortfall may leave a global production deficit lasting into 2016. Citigroup is bullish on palladium, copper, nickel, lead, coking and thermal coal, cocoa and coffee.
- Deutsche Bank forecast commodities will end 2014 in a positive run with nickel, zinc and lead outperforming.
- Donald Selkin at National Securities said certain markets are bullish because of supply issues, including cattle, nickel and coffee, while the worst may also be over for the big three – gold, crude oil and grains.
- Jeffrey Currie at Goldman Sachs expects gold to fall to $1,050 by year-end, copper to fall to $6,200 a metric ton over 12 months due to a major increase in stockpiles.
- The IEA said global oil demand will weaken because of weaker growth in China and Europe, rising exports from Libya, and booming US output, all outweighing potential output disruptions in Iraq.
- Economists expect China to grow 7% in 2015, the slowest rate since 1990.
- Quincy Krosby at Prudential Financial said you need growth in China to support a rally in raw-material prices.
Read the full article at http://www.bloomberg.com/news/2014-09-29/gluts-spur-investor-exit-signaling-prolonged-price-slumps.html
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