Has oil moved into backwardation yet? What does corn’s roll yield look like? How do you know when it’s time to buy—or […]

International coal prices hit $124 per ton last week, the highest level in five months, as strong demand from reconstruction projects in Japan and reduced supply from flood-ravaged Australia have made coal supply tight. The floods in Queensland, Australia cut the country's output of coal by 15%; other big coal producers such as Indonesia, South Africa and Colombia are experiencing similar production cuts due to floods of their own. At the end of March, coal prices were 33% higher than a year ago, and earlier this month mining giant Xstrata PLC (XSRAF.PK) inked a one-year deal with a Japanese utility at $130 per ton, effectively setting a floor under coal prices in the near-term. That's up from $98 per ton the company made in a similar deal a year ago

If you want to see market reporting done right, I can recommend the 2,000-word Reuters special report on Thursday’s commodities crash. It doesn’t just pick a random news event or gesture vaguely at “worries about economic growth” while saying what prices did; it looks at the mechanisms behind the market moves and what might have caused them. It’s worth underlining that Thursday’s percentage declines in commodities like silver and oil would count as a full-on disaster if they occurred in the stock market. Commodities markets are rowdier places than stock markets, however, and the only people who really got hurt are sophisticated investors who can take their medicine.

During our years in the resource investing business, we have developed a diverse client base. Many of our clients are in North […]

In yesterday’s issue, I published a conversation I had with an anonymous copper fabricator executive. He played his cards understandably close to his vest, but he did raise an issue that I believe deserves further inspection.

Below we highlight our trading range charts of ten major commodities. For each chart, the green shading represents between two standard deviations […]

There they go again: After a lackluster start to the trading day, stock indexes took a turn for the worse in mid-morning activity on Wednesday, with commodity producers leading the decline. The S&P/TSX composite index was recently down 158 points or 1.2 per cent, to 13,534. The index plunged more than 240 points on Tuesday. The S&P 500 was down 11 points or 0.8 per cent, to 1345.

With the US dollar expected to remain weak for an extended period of time, ETFs that track commodity classes like silver (SLV), gold (GLD), and other precious metals (DPB) have become popular and conservative investments. Increasingly it is going to be important to have exposure to commodities in a long term portfolio to help offset the almost inevitable onset of inflation.

Sentiment towards bullion trade remains mixed. Momentum favors the short side of trade, but caution is required in expecting a collapse in GLD and SLV values. There were major buyers in at 1490 on gold and 38.50 recently, which are major potential swing point areas. The news wires are covering the increase in margin requirements as a reason for recent declines. Gold is consolidating just above the 20-day SMA at 1500. The Apr. 29 silver signal sent to clients, short from 47.50, has hit its two main targets and is now consolidating just above the 50-day SMA area at 38.70. No signals are forming in the near-term.

The 10% + plunge in silver has some asking if the rally is over while others are claiming the bubble has popped - neither view is accurate. Let's examine what really happened

With silver spiraling out of control, it's worth checking in on some of the other commodities. Indeed the agricultural or soft commodities have, as a group, been surging in recent times, sending the Dow Jones UBS commodities index up over 30% year on year. Not only have they inflated returns on broad based commodity investment products but they've inflated prices, political tensions, and economic risks around the globe.

Things were already looking tight in the coking coal world before Arch Coal (ACI) decided to pay $3.4 billion for International Coal Group (ICO). The deal pays International Coal shareholders a 32% premium over Friday's close and will create the second-biggest U.S. supplier of metallurgical coal. As the buyer, Arch is taking a bit of a short-term beating in the market this morning, but take a look at the long-term prospects here.