Monday, March 31, 2008

Crude Oil Plunges Over $4 on Expected Supply Increase

Analysts surveyed by Bloomberg News believe the oil inventory in the U.S. will increase for the 11th time over the last 12 weeks.

Others believe the same, as the release of the U.S. report on Tuesday is expected to reflect that reality, and the market agreed, with crude oil plunging by $4 a barrel on expected weakening demand.

The average response by Bloomberg analysts was that the U.S. supply of crude oil has increased by 2.25 million barrels as of the week ending March 28.

"We're expecting that this week's Energy Department report will show crude supplies are still building as demand slumps," added Phil Flynn, a senior trader at Alaron Trading Corp. in Chicago.

Another indicator seems to point to lower demand, as refineries operated at their lowest level in almost three years, falling to 82.2 percent.

Gasoline delivery for April declined by 10.07 cents, dropping by 2.7 percent, to close in New York at $2.6163 a gallon.

Nebraska Corn Growers Planting 6 Percent Less Acres Than Last Year

Citing a report from the U.S. Department of Agriculture, Nebraska Farmer reported that farmers in the state would be planting about 6 percent less acres in corn this year than in 2007. Last year there were 9.4 million acres planted, against the 8.8 million projected for 2008.

Nationwide, the USDA said overall corn planting will probably fall from the 93.6 million acres planted last year, to 86 million in 2008, an eight percent drop. Last year's 93.6 million was the largest amount of acres in corn in the U.S. since 1944.

The factors influencing the Nebraska market were higher corn production costs and the higher prices of competitive crops at the time the survey was taken, said Don Hutchens, executive director of the Nebraska Corn Board.

“Corn and soybean markets have fluctuated considerably this spring, and this will likely continue,” Hutchens says. “Although interesting to watch, it can make it more difficult to predict things like planting intentions because each producer calculates the best marketing opportunity for their operation, and those calculations can change. As markets change following this report, what producers intend to plant may change along with them.”

Sunday, March 30, 2008

People Flocking to California to Hit it Big with Gold

The surging price of gold is leading to a second big California gold rush, as people looking to hit it big are converging on the "Gold Belt," as it's called.

Individual prospector hopefuls aren't the only ones migrating to the gold space either, as commercial claims have increased to 2,274 in just the first quarter this year, up from the mere 132 during the same period in 2005, according to the Bureau of Land Management.

Confirming the high price of gold as the motivator behind all this activity, Roger Haskins, senior specialist for mining law at the BLM, said, “We have a market imbalance at the moment and there’s more demand than supply. Gold sits in a little niche because it’s speculative. People buy it as a hedge for the future.”

Another metric showing the increasing interest in mining for gold is the membership in the Gold Prospectors Association of America, which has tripled over a extremely short period of time.

The best-known place people are flocking to is the Gold Belt, otherwise known as the "Motherlode," which is close to Highway 49 and the Sierra Nevada mountains.

A growing number of people have been quitting their jobs and prospecting as a way to make a living.

Friday, March 28, 2008

Wheat News around the Web

Weekend roundup for Wheat


China raises prices paid to rice and wheat farmers

China said Friday that it would pay farmers more for rice and wheat, in a move aimed at raising output and cooling surging inflation that threatens to fuel unrest ahead of the Olympic Games.


Wheat, oils & pulses likely to get cheaper in a global village

For India, the crash in global commodity prices comes as an answer to a prayer. Import of wheat, cooking oil and pulses are now likely to be cheaper as speculators and large funds exit positions in New York and Chicago over the last fortnight.


S.Africa maize, wheat fall on harvest reports

South Africa's benchmark maize and wheat futures prices eased on Friday after reports pointed to plentiful crop supplies locally and internationally.


Wheat growers concerned about new future and no protection

Farmers have told this week's Senate Inquiry, into changes to the wheat export system, that they won't have enough protection.

Grower groups from New South Wales, Victoria and Queensland have told the inquiry that, in years of a large harvest ,AWB used to buy all the wheat in its national pool.


US Wheat Review: Closes Lower On Positioning Ahead Of USDA

U.S. wheat futures stumbled Friday as traders evened up positions ahead of the release of key U.S. Department of Agriculture reports, analysts said.


Arkansas Flooding Drowns Fields, Futures

Empty grain elevators surrounded by a swollen White River await a harvest that may never come as floodwaters drown wheat already planted this spring.


India sees 15 mln tonnes domestic wheat buys in 2008

India has bought 35,000 tonnes of new season wheat from farmers up to March 24 and is confident of scaling purchases up to at least 15 million tonnes in 2008, a senior government official said on Wednesday.


Oil News around the Internet

Weekend roundup for oil news


Oil falls after Iraq restores pipeline flows

Oil fell $2 on Friday after Iraq swiftly restarted a crude pipeline system that had been hit by a bomb attack the day before.


Research and Markets: Learn About ATP Oil Gas Corporations Upstream Oil And Gas Assets Across The Globe

Research and Markets has announced the addition of "ATP Oil & Gas Corporation Oil and Gas Assets Report" to their offering.


Oil down on end of week profit taking, restored Iraq oil flows, US eco worries

Oil extended earlier falls as end of week profit taking gained momentum amid a stronger dollar, news of increased oil flows from Nigeria, restored flows in Iraq and renewed worries over the US economic slowdown.


Chavez against continued oil price rise

Venezuela is not interested in seeing oil prices rise further and is pushing to stabilize the market, President Hugo Chavez said Thursday following a visit to the site of a Brazilian refinery being built to process Venezuelan crude.


US Oil and Gas Rig Count Up 24 This Week

The number of rigs actively exploring for oil and natural gas in the United States rose by 24 this week to 1,808.


Sector Roundup: Oil Refiners Climb, Airline Shares Slip on Fuel Prices, Flight Cancellations

Shares of oil refiners rose Friday as oil prices deflated and a Soleil Securities analyst reiterated a "Buy" rating on Frontier Oil Corp. citing of a positive view on its North American assets.


Meridian Resource to Present At IPAA Oil and Gas Investment Symposium

The Meridian Resource Corporation (NYSE:TMR) announced today that Chairman and CEO Joe Reeves will update investors and analysts on its current operations and future strategy at the IPAA Oil and Gas Investment Symposium in New York City on Monday, April 7, 2008 at 4:10 p.m. Eastern time.


The Latest Corn News

Corn News from around the Internet


Farm Lobby Beats Back Assault On Subsidies
With grain prices soaring, farm income at record highs and the federal budget deficit widening, the subsidies and handouts given to American farmers would seem vulnerable to a serious pruning.


Corn choice could be key to consumers

As spring planting nears, farmers are making a choice that could affect what Americans pay for everything from car fuel to chicken wings.


CBOT Corn Review: Bounce From Losses On Bullish Acres Talk

Chicago Board of Trade corn futures ended higher Friday, rebounding from earlier session losses on bullish acreage outlooks for Monday'splantings report and supportive underlying fundamentals.


Huge U.S shift away from corn to soy acres

Record-high soybean prices are expected to lure U.S. farmers to make a huge shift away from corn production in 2008 and if the current cold, soggy weather pattern persists in key corn states, corn plantings may be cut even more dramatically than analysts now expe


Glo orders NFA to have corn sold in its outlets, supply watched

BEFORE the supply of corn grits runs out, President Arroyo ordered the Department of Agriculture (DA) to find out if local distributors have been hoarding it or if it is distributed unevenly.


Corn farmers anxious to get back into fields

Recent rains and flooding have many Arkansas farmers cooling their heels. They would like to be preparing their land for planting corn, but weather-related problems have delayed tillage operations.


South Africa Raises Corn Crop Estimate by 1.7 Percent

South Africa, the biggest corn producer in Africa, raised its corn crop forecast for this season by 1.7 percent.


What's Happening with Silver

Silver News from around the Web


Soltoro Receives Notice Southern Silver Proceeding With Second Year Earn in Option at Quila

Soltoro Ltd (TSX VENTURE: SOL) has received notification from Southern Silver Exploration Ltd. that it wishes to proceed into the second year of its option on the Quila gold-silver-copper project in Jalisco, Mexico.


Silver Eagle Intersects Mineralization in 17 New Drill Holes

Silver Eagle Mines Inc. ("Silver Eagle" or the "Company") (TSX: SEG) is pleased to announce results from 20 additional diamond drill holes, all but one drilled on the Calvario vein system at its Miguel Auza Mine in northwestern Zacatecas, Mexico.


Silver Bull Market Outperforming Gold

Mine production could not satisfy physical demands of either gold or silver. However, I like silver better because most official sectors, such as the US government, have run out of silver.


Increase in gold, silver prices testing resolve of coin collectors

The recent boom in the gold and silver markets has tested the resolve of many coin collectors, who have to decide whether to add to their collections now or wait until some time in the future when precious metals dip to a more affordable level.


Silver Spruce Resources Inc.: Drilling Begins on Mount Benedict Property, East End of Labrador's CMB

Silver Spruce Resources Inc. is pleased to announce that diamond drilling has begun on the, T-649 and Super 7 showings on the Mount Benedict Property, located in the eastern part of the Central Mineral Belt (CMB) of Labrador.


Goldcliff Discovers New-Ainsworth Silver Targets

Leonard W. Saleken, Chairman of Goldcliff Resource Corporation (TSX VENTURE:GCN) is pleased to report the discovery of five new silver exploration targets on the Ainsworth Silver claims.


Lessoning Inflation Concerns Triggers Drop in Gold, Sell Off

Better than expected news from the U.S. Department of Commerce concerning consumer spending, evidently gave the U.S. dollar some strength at the end of the week, along with news inflation isn't getting out of control.

As a result, gold fell as those using it as a hedge against inflation sold off some of their holdings.

Other gold news from around the web:

Gold Plummets on Stronger Dollar

Gold prices fell sharply Friday after the dollar ticked higher and crude oil retreated, diminishing the precious metal's appeal as a hedge against inflation.


Gold falls 2 percent in broad commodities sell-off

Gold fell more than 2 percent in a broad commodities sell-off on Friday, with a rise in the dollar and softer oil prices dampening the metal's allure as an alternative investment ... More


Gold-mining shares decline amid dollar strength, benign inflation figures

Shares of gold mining companies fell Friday as the yellow metal came under pressure amid strength in the dollar, falling oil prices and tame inflation numbers ... More


Gold drops towards 930 usd on solid US economic data

Gold continued lower, dropping towards 930 usd after solid US economic data expedited an end of week slide started by weaker oil prices and the dollar's firmer footing.


Gold futures down 2% as other metals fall

Gold futures ended sharply lower Friday, as strength in the dollar and broad weakness in the commodity markets weighed on the precious metal.

Gold for April delivery dropped $18.20 to end at $930.60 an ounce on the New York Mercantile Exchange.


Iamgold Profit Falls 9.3% on Costs at Quebec Mine

Iamgold Corp., owner of the Doyon mine in Quebec, said fourth-quarter profit fell 9.3percent because of costs to find additional gold at the deposit.


Investors confident despite Barrick CEO departure

Barrick Gold's (ABX.TO) deep pool of talent and track record of succession planning is letting investors shrug off the surprise departure of Chief Executive Greg Wilkins, as the company's founder, Peter Munk, temporarily retakes the reigns.


Thursday, March 27, 2008

Romania Intends to Join other European Union Members in Banning Monsanto Corn

Romania was a large believer in and producer of GM crops before it joined the European Union last year. Now they had a revival and have joined the anti-GM religion, and are looking to ban growing the crop within its borders. It would be the latest setback to the biotechnology industry. Six other EU members have bans in place.

Romanian environmental minister Attila Korodi called for a moratorium on planting the Monsanto GM corn named MON810, with the possibility of instituting a ban on April 15.

The tool Romania will use to justify the ban would be studies used by France and Hungary that allege there is some type of negative effect on the environment.

But as Europabio, a representative of the biotech companies says, “The specific biotech maize has also been the subject of thorough scientific reviews by scientific communities around the world and has received positive approvals by the world’s most robust approval systems, as well as EFSA.”

They added that the bans were totally baseless and would harm farmers.

The Newest Craze? Gold Leaf Facials - No Kidding!

We may soon have to take up a new mantra, as we push aside diamonds being a girls best friend to gold, as a company in South Carolina says it has made a breakthrough and now offers women the oppertunity to take gold facials.

UMO is the manufacturing company behind the new craze, and women from all over the United States are flocking to get the treatment.

According to COO of the company, Ron Razeggi, he had this to say as to how it works: "The skin tries to reject the gold because it's a foreign object. In order to do that, it builds new cells.

"Right now, the body produces new cells every 28 days. But this accelerates the cell-building and, as a result, it firms and tightens the skin."

Called the "Luxe 24 Karat Gold Facial," the treatment only uses the highest grade of gold leaf, where the gold leaf is laid upon the face and then massaged into the skin, which takes approximately 80 minutes to complete. The cost is about $350.

I guess this isn't something gold investors need to be too concerned with as to creating a supply problem for gold any time soon. But we better watch the ladies. If this catches on, we better hide our gold, or look for the price to increase.;-)

Oh by the way, do the ladies get to keep the gold after their facial?

Wednesday, March 26, 2008

Corn Futures Will Continue to Rise because of Several Factors

Corn futures on the Chicago Board of Trade finished higher on Wednesday, with a number of factors continuing to contribute to its rise.

Future contracts for May increased to $5.52 1/4, up by 7 1/2 cents; July contracts finished at $5.65, and increase of 8 cents; December contracts ended at $5.68 1/2, an increase of 8 3/4 cents.

While speculators played some role in the increase, as consumer confidence reports and the dollar starting to drop again have brought them back to commodities, after their exodus last week.

Other drivers that should guarantee continuing price increases are the midwest corn fields which are being held back from being planted because of wet fields; and forecasts are it'll continue getting rain over the next week, further slowing the planting season - especially in the southeastern portion.

Overall consensus by analysts from a Dow Jones Newswires' survey are the number of acres planted in corn this year will fall by 6.2 million acres to 97.387 million. That's down from the 93.600 million acres planted in 2007.

Other bad weather news is the the northern half of the midwest could be hit with up to 2 inches of rain, which will cause them to delay corn planting, making the harvest even further off.

If this keeps on much longer, the price of corn will probably continue to go up, as there could be anticipated times of low supply.

Of course the ethanol issue continues to rear its ugly head as the battle for corn, acreage and planting other crops like wheat continues on, reeking havoc in American agriculture and the price of food.

Effective Date for Price Limit Rules on the Kansas City Board of Trace Wheat is March 28, 2008

On Friday, March 28, it needs to be remembered that the Kansas City Board of Trade has been given approval by the Commodity Futures Trading Commission (CFTC) to change the daily price limits for hard red winter wheat options and futures.

Since it's the effective business date, it entails the evening session on Thursday, March 27, 2008.

The press release said:

"The initial daily price limit for wheat remains at 60 cents per bushel and will increase by 50 percent the following trading session when the price of two or more futures contract months within the first five listed non-spot contract months, or the final contract month of a crop year, closes at limit bid or limit offer. Price limits can expand two consecutive times: to a 90 cent per bushel limit and then to a maximum $1.35 per bushel limit.

"Daily price limits will step back to their prior levels when no futures contract month closes at limit bid or limit offer that day. If price limits are $1.35 per bushel and no wheat futures contract month closes limit bid or limit offer, daily price limits for all contract months revert back to 90 cents per bushel the next business day. If price limits are 90 cents per bushel and no wheat futures contract month closes limit bid or limit offer, daily price limits for all contract months revert back to 60 cents per bushel the next business day. The CME Group is adopting the same price limits policy for its wheat contracts.

"Following the expanded price limits effective trade date February 11, market users asked for additional changes. Market users wanted to see: price limit provisions that expand based on the activity of the front months where the majority of open interest resides, a maximum amount that price limits can expand to, and provisions that allow price limits to contract at the same rate that they expand. These changes address all three of these concerns.

"Options pricing is subject to the same daily price limits as the underlying futures contract."

Gold Futures Continue Rebound on Economic Concerns

The continual weakening of the U.S. dollar, along with ongoing economic news that confirms a slowing economy, is stimulating gold to rebound after the downturn last week, and it is walking with a swagger again.

April contracts for gold surged by $14.20 to finish the session at $949.20 an ounce on the NYMEX.

News that the Clear Channel Communications (NYSE:CCU) deal was ready to collapse, also reminded investors of the problems in the credit market, which also helped gold to move up.

The Amex Gold Bugs Index (HUI) also increased today, ending at 459.21 points, a 1.9 percent rise.

Some of sectors EFT fund rose as well, with the StretTracks Gold Trust EFT (NYSE:GLD) climbing to $93.80 and the Market Vectors-Gold Miners ETF (AMEX:GDX) increasing to $49.90.

UTS Energy and Teck Cominco Looking at Developing another Oil Sands Mine

UTS Energy Inc (Toronto: UTS.TO), which specializes in developing oil sands properties, along with their partner Teck Cominco LTD (NYSE:TCK), announced Wednesday that they have plans to develop a new oil sand mine that will eventually produce on average about 160,000 barrels of "tar-like bitumen" a day.

The project will be on the Fort Hills oil sands, where projections are the "Frontier" mine should be producing bitumen by 2015. Bitumen is one form of crude that is extra-heavy, and has to be upgraded.

There's another mine they're also looking at developing near the Fort Hills oil sands, which while smaller, they project could an additional 50,000 barrels a day. That mine, dubbed Equinox, should be up and running by 2014.

All of this is made possible by the rising price of oil, which made past development of heavier crude cost prohibitive.

Most of the costs come from having to separate the bitumen from the sand and then upgrading it to synthetic crude ready for the refineries.

The two companies haven't decided yet whether they'll have the heavy crude upgraded at the Fort Hills project, or ship it as is to refineries.

They're also looking to possibly make a deal with American refineries, where they offer a share in their oil sand holdings for a stake in the refinery. Two other Canadian companies - EnCana Corp (Toronto: ECA.TO) and Husky Energy Inc (Toronto:HSE.TO) - have made deals like that with U.S. refineries.

Estimates are the northern Alberta oil sands area should end up producing about 3 million barrels a day by 2015.

U.S. Silver Corporation Hires Two Senior Level Geologists

In a press release, U.S. Silver Corporation announced they had hired two senior level geologists: Greg Nickel and Jeffrey Moe.

Nickel will be part of a team at the Galena Mine, where he's worked before. He will be the Senior Exploration Geologist. His responsibilities will include the underground exploration of the Coeru, Galena and Caladay. Nickel spent three years at the Galena mine as a geologist from 1988 through 1991.

He also helped in getting the operations at the property going again in 1995-1997 in the capacity of Chief Geologist. Eventually he was the Chief engineer through 2000. He has over 20 years of experience in geology, diverse mining, hydrogeology and engineering.

Moe will enter the company as a Senior Mine Geologist, also at the Galena Mine. Moe used to be the Chief Geologist at the Sterling Mine Co. at the Sunshine Mine.

At the same mine he also worked as a mine and exploration geologist from 1995-2000.

His job responsibilities will include geologic modeling to support the exploration and production progrmas. He will also be responsible for "data management, quality assurance/quality control, and estimation of ore reserves," said U.S Silver in their press release.
U.S. Silver owns and operates the Galena, Coeur, Caladay and Dayrock silver-lead-copper mines in Shoshone County, Idaho.

According to the company, the Galena Mine is the second most prolific silver mine in the history of the U.S., with production exceeding 210 million ounces of silver since 1953.

The company has control over approximately 18,000 acres of land in the middle of the Coeur d'Alene Mining District.

Is Ethanol Overrated? I think so!

Ethanol has two major factors to consider when looking at the overall industry.

One is to see it as a pure investment play, and no matter what you feel about how the industry has emerged, and some of the negative impacts it's already producing, it's still a legitimate business to you.

Second, is the way the industry has come about; whether it's really producing much benefit, is a true alternative fuel, and if in reality it can survive over the long haul.

To honestly study the industry, one must cut through a lot of misinformation and punditry to reach the facts; especially with proponents of the alternative fuel, who have close to a religious affiliation with it, to the point where to attack it is similar to attacking someone's true religious beliefs.

To me, we have to be willing to look at all aspects and sides of the industry to get a true picture of its long-term possibility as an investment, as well as if it has real possibilities in its present form to be both fuel and cost efficient.

The fact that it has to be subsidized with tax dollars to even be an industry, and mandated by law, shows the public in general doesn't care one way or the other if it is successful or used for fuel in the way proposed. It's obviously been used as a fuel additive for some time.

Now that it's causing major disruptions in the agriculture industry, and generating a lot of food inflation, people are already starting to question if it's worth the effort and cost; and rightly so.

It's the key source of inflation at the grocery store, and is having that impact all over the world. In other words, it's the poor people that will suffer again because of the unintended consequences that always come from government initiated programs like this.

Not only is there the artificial demand generated by the law to grow more corn to feed the ethanol beast, but it is causing wheat growers to move more corn into their fields, which is causing the price of wheat to rise because of a lower supply.

So, the idea is to look at these two sides of the issue as we go forward. Someone may invest in ethanol without necessarily believing it does any good - and even may cause more harm than any potential benefit - yet still make money because of the way the whole industry is set up.

At the same time, we can put it under the microscope and find out if it really is worth the time and effort to pursue. I personally think in the long term this is going to be another government program eventually dropped after billions of dollars are spent and lost because of someone bypassing the facts and turning it into a cause.

Tuesday, March 25, 2008

Argentina Farmer Strike Causes Corn to Rise to Allowed Limits

After an export tax increase in Argentina, farmers protested by blocking ports and asserting they'll plant less crops this year than in the past - including corn.

The strike shut things down so completely that only 19 trucks entered the port of Rosario, according to reports, when a usual day in March can have up to 6,000 trucks delivering goods to the port. Rosario accounts for about 60 percent of the grain exported out of Argentina.

The protest is actually in reference to increases in export taxes on soybeans and sunflowers seeds, which was increased to around 44 percent from the 35 percent last week.

As a result, the possibility that exports for Argentina could be cut back, caused prices to rise as high as they're allowed for corn by the Chicago Board of Trade.

May delivery of corn futures rose by 20 cents, to reach $5.4475 a bushel, or 3.8 percent.

Over the last year, corn prices have risen by 35 percent and attained a record on March 11 of $5.795 a bushel.

Another factor causing the increase of corn prices is the weather in the U.S., which has been extremely wet in the eastern portion of the midwest, which is causing farmers to delay planting. It looks like the wet conditions will continue on for some time in some parts of this region of the country.

Finally of course, the artificially created market for ethanol continues to put pressures on corn prices, as the unproven fuel continues to reek havoc in the markets.

All this combined makes the price of corn likely to continue increasing in price over the next several months.

Yukon Gold Lands Senior Geologist Gary Cohoon for Vice President, Exploration

Yukon Gold Corporation (OTCBB:YGDC) just got better, as they landed senior geologist Gary A. Cohoon to be Vice President of their explortation unit.

Cohoon has had extensive experience in exploration and expansion of gold, as well as uranium and base metals.

Some of the more notable accomplishments in his career have been the identification for acquisition of the Santa Gertrudis open pit gold mine in Sonora Mexico, the discovery of the Dona Lake Gold Mine in Ontario, and managing the exploration for uranium in the Athabasca Basin in Saskatchewan.

Cohoon will be responsible for the overall exploration and development strategies of the company, along with the geological team.

Near term he will specifically target the Marg deposit in the Yukon, while also searching for and evaluating potential exploration projects for the purpose of acquisition by Yukon Gold.

President and CEO, Ron Mann said about getting Cohoon: "Yukon Gold is extremely pleased that a geologist of Gary's reputation and caliber has joined our team."

Yamana Gold Inc. Releases Fourth Quarter Results

Fourth-quarter results for Yamana Gold Inc. (NYSE: AUY) were released today, for the period ending December 31.

In most areas the company had a banner year, as they increased in a number of key markers. The end results stated here don't include those of Meridian Gold or Northern Orion before they were acquired in October, 2007; neither for the complete quarter or year.

Overall sales in the fourth quarter came to $218.6 million, growing by 9 percent over the third quarter. For the year, sales reached $747.1 million, a significant 342 percent increase over 2006.

Results for the fourth quarter in net earnings also were strong, as they grew to $47.1 million, up by 57 percent from the third quarter. Net earnings for the year came in at $157.2 million, a solid 324 percent from 2006.

Before tax adjusted earnings performed even better gaining 686 percent over 2006, and finishing at $259.1 million, with after tax results coming in at $227.6 million. That equaled $0.55 a share.

Earnings for the company's mine operating earnings grew to $384.6 million, a surge of 1,000 percent over 2006.

The company declared a quarterly dividend of $0.01 a quarter per share.

See the full details of the report here.

Gold Again on the Rebound - Surges over $15 an Ounce

The news last week was commodities were out of favor. How a few days changes everything, as the U.S. dollar is plunging again, consumer confidence and expectations are down, and housing prices continue to fall.

That means we're going to see commodities climb again, with gold leading the way.

Last week gold dropped by the most it had in almost two years, as investors, or rather speculators, fled the sector. The increase of over $15 an ounce today shows it's back in favor, and probably ready for another climb.

"The low consumer confidence number definitely helps gold because it's seen as a safe haven and an alternative asset," said Carlos Sanchez, analyst with CPM Group in New York. "The prospects of the economic situation and tightening of the credit fallout hasn't disappeared, so we'll likely see gold hold at these levels and probably go higher."

Other commodities on the upside today were agriculture, copper, crude oil and silver futures.

April delivery for gold increased to $16.30, to finish at $935 an ounce on the NYMEX.

Ethanex - Kansas Ethanol Company - says will File for Bankruptcy

Saying they weren't able to secure interim financing to continue operations, Ethanex Energy (OTC BB: EHTE.OB) says it has plans to file for bankruptcy.

In a federal filing on March 24, the company stated they had ceased operating, and they now have a skeleton staff of three.

This effectively ends an agreement where they were going to buy an ethanol plant in Nebraska for $50 million, which is owned by Midwest Renewable Energy.

Ethanex needed $1.5 million in short-term financing to continue operating.

Pan American Silver Corp. Confirms Filing of 2007 Audited Financial Statements

According to Pan American Silver Corp. (NASDAQ: PAAS), they have officially filed their audited financial statements to the appropriate Canadian securities regulatory authorities.

The company will also file their annual 2007 information form by March 31, 2008.

At the same time, they will file the same document with the SEC via For 40-F.

Pan American Silver now has seven mines operating in Mexico, Bolivia and Peru. An eigth mine in Argentina is scheduled to begin production sometime in the second quarter of 2008, says the company.

Chinese Corn Oil Company Raises Capital on NYSE Euronext's Alternext Exchange

The NYSE Euronext (NYSE: NYX) has been a magnet for Chinese mainland companies, as 44 of them have listings with the exchange. The total value of those combined companies are $1.5 trillion. There are 58 companies overall from the Chinese region.

The first company from mainland China to raise funds on the exchange is the China Corn Oil company, which specialized in corn oil. They raised $7.8 million. Raised through a private placement, now China Corn Oil will have direct access to the exchange

NYSE Euronext's Alternext exchange caters to smaller and mid-sized companies.

Monday, March 24, 2008

Crude Oil in New York Falls for Fourth Day in a Row

With the drop in crude oil prices for the fourth day in a row in New York, it has caused speculation that the continually slowing U.S. economy will cause less demand for oil and result in growing reserves.

The strengthening of the U.S. dollar has also caused investors to move some of their money out of commodities, as its use as an inflation hedge is looked upon as over - at least for now.

"The sharp fall in commodities has prompted investors to reassess their investments," said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. "The perception is that the U.S. dollar has somewhat shifted and begs the question whether commodities are a good investment hedge."

On the NYMEX, oil fell as low as $99.66 a barrel in after-hours trading; about 1.2 percent overall. Since March 17, oil has plunged by 11 percent from the record $111.80 a barrel it reached at that time.

Brent crude for May fell to $99.07 a barrel, or 79 cents on London's ICE Futures Europe exchange. That's down from the $99.86 it finished at yesterday; the first time since March 4 it fell ended the session below $100 a barrel.

Chinese Commercial Banks now Allowed to Trade Gold Futures

While the Shanghai Futures Exchange (SFE) had been allowed to trade gold futures as of January, the same wasn't true for commercial banks in China, which had been barred from doing so.

That has changed now, as the China Banking Regulatory Commission (CBRC) announced commercial banks will now be allowed to sell gold futures under specific guidelines, within their domestic market.

One of the key requirements commercial banks in China must adhere to, is they must have a "capital adequacy ratio of more than 8 percent" in order to even apply for a trading permit. They also must have the necessary qualifications to trade in derivative markets to enter the field.

According to the CBRC, the reasonse for the qualifications is to protect Chinese banks, who have no experience in trading futures.

How the Wheat Market Performed on 3-24-2008

For May Wheat, it climbed by 32 1/2 to finish at 1020, finishing off its high of 42 1/4, but up by 32 1/2 from its low. July Wheat finished a little lower, ending at 1018 1/2, which was 36 down from its high, and up 45 from its low.

Traders on the floor said weather was one of the major factors today, as weather in the west and southwest continues to be dry in the hard red wheat areas, while wet weather persists in the south central and eastern soft red wheat areas.

With wheat having supply problems over the last year, Egypt announced via their agriculture minister that they were planing 3.2 million acres of wheat this year, the most they've planted in a decade.

U.S. Government Needs to Look in Mirror to find Source of Food Price Increases

With wheat and corn being two of the primary food sources in the world, the U.S. government needs to only look in the mirror to find out where the origination of these huge price increases are coming from.

Why? The totally ignorant idea to mandate ethanol increases is proving to be a destructive force in food prices around the world.

The reason the wheat prices are increasing, is the growing price of corn, as a result of the artificially induced ethanol market, has resulted in less wheat being grown, which has then caused the prices to rise.

Creating the artificial and basically worthless ethanol market has already caused huge disruptions in the market, and we're only getting started.

The Bush administration mandated an increase of six times current ethanol use by 2022, which is skewering the food markets in a big way.

As usual, when governments enter into areas they have no idea what they're doing, they end up causing disasters, as they aren't able to take into account the unintended consequences which always arise from these types of initiatives.

To exacerbate all this, wheat harvests from around the world have been poor, as weather slowed the harvests in parts of China, Europe, Australia, and a number of other Asian countries. This created a demand for American grown wheat which was unexpected; causing prices to rise again.

We need to drop the ethanol mandate, which is starting to be questioned by an increasing number of agriculture experts and scientists as to its real value; similar to global warming being discovered recently as built upon faulty computer models, and in reality the weather worldwide has been declining in temperature since 1998.

Saturday, March 22, 2008

Centerra Gold CEO Leonard Homeniuk sells 60% of Shares

While Centerra Gold (TSX:CG) CEO Leonard Homeniuk says the reason he sold his shares in the company were for financial reasons, the plunge in gold prices, along with the drop in the stock prices, had to be part of the reason for the sell off as well.

Homeniuk sold 60 percent of his shares in the company, which equaled almost $6.9 million. His reasons stated were for add more diversity to his portfolio, as well as finanicial planning.

The stock shares were sold between March 11 and March 18 for prices ranging from $13.51 to $14.68. The close for the stock price at the end of the week was $12.34.

He was lucky in his timing, as the stock has consistently dropped over the last week, and the 478,700 shares he sold would have been worth a lot less than he got for them.

Even with selling the stocks, Homeniuk says that he believes the shares are still undervalued.

At this time Centerra has two mines in operation, the Kumtor Gold Mine in Kyrgyzstan and Boroo Gold Mine in Mongolia.

Ethanol Continues to Victimize Consumers through Higher Grain Costs

The taxpayer subsidies included with producing ethanol continue to take their toll on consumers, as higher grain costs are impacting the prices of a number of goods; including cereal.

An AP report said: "The cost of grain has affected a number of companies, especially those that make cereals. Grain prices have skyrocketed largely due to demand for corn used to make the alternative fuel ethanol."

Company officials for General Mills (NYSE: GIS) said it was their highly successful marketing of over several product categories that helped them fend off the high grain cost directly connected to enthanol production. They were able to successfully raise their prices this quarter without a loss of sales generated.

I wonder how long it'll last before consumers rebel in this slowing economy?

One writer asks if it makes sense to increase consumer prices over producing ethanol, "which is a suspect alternative fuel that's being used to fight a suspect phenomenon, global warming. Legislators, together with environmentalists, have created global inflation, to fight a problem that some scientists don't think exists. Does that make sense?"

That's the question that needs to be answered. The religious-like devotion to ethanol by corn farmers, some environmentalists and politicians will make it a battle to find the real truth to the ethanol equation.

When people turn it into a "religous" fervor, it's hard to separate fact from fiction, as the emotions run high concerning the "green" god.

Friday, March 21, 2008

Middle East Jewelers Say Gold Sales are Dropping

Last year those jewelers in the Middle East thought they were going to have another banner year, but contrary to that assumption, prices have declined, rather than increased by the 15 percent expected because of the alleged demand.

The problem is gold is now considered by the middle class there as a means of generating income because of the high prices.

“Middle income earners are selling rather than buying to gain profit,” said Mohammed Abdullah. “Most of our customers buy gold and jewelry for personal use rather than as a form of investment. We hope prices will drop but in view of what is happening with the market’s fluctuations, I don’t believe this will be the case."

Other gold shop owners said their business is down, but nowhere near some of those that say sales are down by up to 70 percent.

As a more experienced shop owner said, “Our sales dropped only five percent compared to last year.”

It seems what's happening is the surge in the price of gold has brought a lot of newcomers into the field, who don't know how to manage the ups and downs of the business. That is probably what's accounting for the large disparity in sales declines.

Either way, contrary to Asia, physical gold sales have fallen in this part of the world over the last year.

Not Everyone Bothered by Drop in Gold Prices: Ask Asian Jewellers

After Thursday's drop in gold prices of over $100 an ounce, Asian jewellers scrambled to buy gold for their trade.

India, unsurprisingly, was a very busy market, as the world's largest consumer of gold continues to buy on the drop in gold prices, as their wedding season is in full swing.

Along with the long-held custom of building up a daughter's dowry from her birth, Indians also distribute it to one another for a number of special occasions. That, and using it for jewellery, as well as an investment, makes gold so important to the Indian people.

Another key Asian buyer of gold has been Vietnam, whose 12 percent inflation rate last year has kept them buying gold as an inflation hedge.

"Vietnam is buying gold even when it's trading at record highs this month. For them it's more for a hedge because inflation was more than 12 percent last year," said a dealer in Singapore. "Nobody wants to keep dollars because it's depreciating."

Other countries where gold is in high demand for jewellers are Thailand and Indonesia.

Will Exxon Produce More Oil? Probably Not

The question for Exxon Mobil (NYSE: XOM) isn't whether they're able to produce more oil, rather it's whether they are willing to. I think the answer is they're not willing to, and will maintain their production at about where it's at today over the next few years.

Exxon Chairman Rex Tillerson, at a March meeting with analysts, responding to the question of why the company wasn't looking to generate more growth through 2012.

Tillerson said, "We don't start with a volume target and then work backwards, it really goes back to what is an acceptable investment return for us."

That's another way of saying that increasing production for the sole purpose of causing oil prices to decrease isn't a good way of doing business. This solid way of doing business is one of the reasons the company led a very profitable industry with a return on capital of 32 percent.

This is music to shareholders ears, as that, along with the buyback of company shares, has resulted in less shares available to the public, and more barrels distributed per share for Exxon shareholders. Tillerson said that the buybacks have resulted in shareholders enjoying a 20 percent increase in their portion of the oil production of the company.

Another question to consider is whether Exxon is able to produce more. This must be asked because their production in decreasing by a large amount in its European and U.S. regions, dropping by a huge 37 percent since 2000. That equals approxmately 500,000 barrels less a day now, than it did that short time ago.

The problems in Venezuela stealing the business away from Exxon through Hugo Chavez nationalizing the fields, as well as the specific deals made with some foreign countries, where Exxon puts up the investment capital, and is paid back in barrels of oil. Once oil prices increase to a certain level, Exxon gets less of the barrels. The obvious ramifications of the current price of oil speaks for itself: Exxon has lost a lot of barrels there.

Even so, over the next four years, Exxon will bring new fields into the fold in Africa, Russia and the Middle East. While they could conceivably increase output above the losses mentioned before, they're choosing to grow at a rate that basically replaces existing losses, rather than increase production.

This looks like a good plan to me, and shareholders should reap the benefits for years to come.

Active Oil and Gas Rig Count Drops by 8 in U.S.

Rigs in the U.S. currently active in exploration of oil and natural gas in the U.S. has declined by eight this week; now numbering 1,784.

Citing Baker Hughes Inc., the Houston Chronicle said the lowest level rigs have dropped to in the U.S. was 488 in 1999, whereas the high was 4,530 in 1981.

Breaking it down, oil rigs now stand at 341 in the U.S., while natural gas exploration rigs stand at 1,433. Ten of the rigs were listed as miscellaneous.

Rigs in Lousiana fell the most, with the state dropping four.

Last year the total number of rigs numbered 1,745.

Thursday, March 20, 2008

Truth and Consequences of Ethanol

As in global warming, much of the press coverage for ethanol has been highly one-sided, and not much of the other side of the story is being told.

I've included Ethanol Fix as part of the Commodity Network in order to give a more thorough view of the subject, and look at the potential positive and negative effects of it upon the world.

It's not the answer to oil that its proponents have been evangelizing about, as enormous problems remain to be solved, if they can be solved at all. Honest people have readily admitted that, while for others who it has almost become a religious crusade, won't admit anything is wrong with it, and make one excuse after another when confronted with the problems ethanol offers and faces.

So we'll do our best to show it in the light it's really in, and keep the demogoguery hopefully to a minimum.

This is too important and costly to just let slip through our fingers without rigorous and honest research and input into the field.

To that end, welcome to Ethanol Fix, which so far in the real world, isn't a reality.

Silver Falls Almost 18 Percent for the Week

The tremendous plunge in the paper market contracts for silver has been the reverse in the physical markets, as they are going in opposite directions.

There's been a lot of chatter lately that there are physical coin shortages; especially silver coin.

While the rumors may be true, it's probably in the silver coin market, not with LBMA bars, which, according to founder and Chairman James Turk, "will always be available."

Last spot rates for silver were $16.86 an ounce, close to the low of $16.752.

USDA's Prospective Plantings Report for Corn to be Released Soon

Those watching the commodity corn market should remember that the USDA's Prospective Plantings report is scheduled to be released on March 31.

History has shown that many times the futures market makes a lot of swings leading up to the release of the report; with speculation and rumors generating the swings.

On the other hand the elevator markets are usually less volatile, and trade on the realities of supply and demand rather than the unknown.

In other words, we need to be cautious during this time, and resist the temptation to follow the speculators.

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Oil Prices drop below $100 a Barrel

The ups and downs of commodities, the U.S. dollar, and the oil market continue, as oil futures dropped below $100 a barrel today, making it a plunge of about 10 percent since it hit record highs of $111.80 a barrel on Monday.

Light sweet crude for New York oil in May fell to $99.20 a barrel, while London's Brent North Sea crude dropped by $2.50, to end at $98.42 a barrel.

"Crude fell below 100 dollars a barrel as fears of a US recession, its impact on the rest of the world, and on oil demand growth continue to dominate headlines," said Sucden analyst Michael Davies on Thursday.

Much of the ups and downs comes from the declining U.S. dollar, which commodities are denominated in. The strength of foreign currencies provides cheaper buy-in for investors.

As far as available reserves in the U.S., the US Energy Information Administration (EIA) said for the week ending March 14, they increased by 200,000 barrels, to bring the total to 311.8 million barrels. That's the typical amount for this time of year, although the market thought it would rise to about 2.3 million barrels.

The banking and credit problems are seen as another key contributor to the price decline in oil, which could potential slow global growth down significantly.

It's going to take some time for this to all work itself out, as so many variables are floating around out there. Until those things settle down, the price of oil won't, neither will a lot of other commodities.