Posts by "qiman"

Financial speculators have come under renewed fire from anti-poverty campaigners for their bets on food prices, blamed for raising the costs of goods such as coffee and chocolate and threatening the livelihoods of farmers in developing countries.

The World Development Movement (WDM) will issue a damning report today on the growing role of hedge funds and banks in the commodities markets in recent years, during which time cocoa prices have more than doubled, energy prices have soared and coffee has fluctuated dramatically.

The charity's demands for the British financial watchdog to follow the US in cracking down on such speculation comes against a backdrop of cocoa prices jumping to a 33-year high as it emerged that a London hedge fund had snapped up a large part of the world's stock of beans. On Friday, traders say, Armajaro took delivery of 240,100 tonnes of cocoa the biggest from London's Liffe exchange in 14 years and equal to about 7% of annual global production, according to the Financial Times.
http://www.guardian.co.uk/business/2010/jul/19/speculators-commodities-food-price-rises

Traders will face new rules aimed at making it easier for regulators to prove manipulation in markets for commodities such as oil, wheat and natural gas under the financial overhaul awaiting President Barack Obamas signature.

The legislation also targets any activity that shows a reckless disregard for orderly trading in the closing period, during which the days settlement prices are determined. The provision targets a practice known as smashing or banging the close, where traders attempt to bully the days settlement price by buying or selling large volumes just before the close.

Its going to be very much like the standard for pornography, said Gary DeWaal, general counsel for Newedge USA LLC, the worlds largest futures broker. The CFTC is going to say, we know orderly when we see it. And thats going to be a bone of contention.
http://www.bloomberg.com/news/2010-07-19/commodity-manipulation-may-be-easier-to-prove-with-u-s-financial-overhaul.html

I should have continued watching cocoa for a major short op, today in london now down 4.5 % and US 6%, so much for cornering the market who ever it was!

Wasn't sure where to put this article, but since it is about a commodity here it is. I follow other commodities as opportunities arise, and this is a very interesting development:

Mystery trader buys all Europe's cocoa
Even Willy Wonka might struggle to use this much chocolate. Yesterday, somebody bought 241,000 tonnes of cocoa beans.

It is unclear which person, or group of traders, was behind the deal, but it was the largest single cocoa trade for 14 years.

The cocoa beans, which are sitting in warehouses either in The Netherlands, Hamburg, or closer to home in London, Liverpool or Humberside is equivalent to the entire supply of the commodity in Europe, and would fill more than five Titanics. They are worth 658 million.

Analysts said it was very unlikely that a chocolate company, such as Nestle or Kraft, or even their suppliers, would buy such a huge order in one go and that is was probable that one or a number of speculators, possibly hedge funds, had attempted to corner the market. By doing this, they would have control of the entire supply in Europe, forcing the price yet higher
http://www.telegraph.co.uk/finance/markets/7895242/Mystery-trader-buys-all-Europes-cocoa.html

@ stationdealer, thanks for your interesting and entertaining thoughts, looking forward to hearing more specifics regarding some of your short term targets if you find the time!