Long Crude Oil Speculative Bets Rise To All Time High

Whether or not institutional investors, large speculators, decided to invest alongside Putin in the one trade that is most critical to the future prosperity and positive cash flow balance of Russia, namely keeping the price of Crude high, and rising, is unknown, however, as the following chart the net position in crude oil futures as of the week of March 4, just hit an all time high of $44.0 billion up from $42.4 billion the week prior, surpassing all prior peaks, and certainly any set during the summer of 2008 when oil was threatening to make a run on $150, and was set to hit $200 if one believes Goldman (which nobody does).

Needless to say, any de-escalation in the Crimea - which has certainly been the key catalyst for the full court press to bet on rising crude prices in recent weeks - will have a substantial knock on effect of forcing open call positions to close, and in the process lower the price of crude further beyond just fundamentals, assuming those still exist.

Weekly Economic Data for the week 08-Mar-14 to 14-Mar-14

Data for the week 08-Mar-14 to 14-Mar-14

Date	Time (IST)	Country	Data	Exp.	Prior	Exp. chg today	Avg. chg of last 1 year	Exp. Impact on Price
08-Mar-2014	--	China	Exports (YoY)	7.5%	10.6%	-3.10%	5.65	Neutral
08-Mar-2014	--	China	Imports (YoY)	7.6%	10%	-2.40%	6.92	Neutral
08-Mar-2014	--	China	Trade Balance	14.5B	31.86B	-17.36	13.34	Bad
09-Mar-2014	07-00 AM	China	Consumer Price Index (YoY)	2.1%	2.5%	-0.40%	0.43	Neutral
09-Mar-2014	07-00 AM	China	Producer Price Index (YoY)	-1.9%	-1.6%	-0.30%	0.61	Neutral
10-15 Mar-2014	--	China	Money Supply M2 YoY	13.2%	13.2%	0.00	0.71	Neutral
10-17 Mar-2014	--	India	Exports YoY		3.8%		4.06
10-17 Mar-2014	--	India	Imports YoY		-18%		7.12
10-14 Mar-2014	--	European Monetary Union	EU, U.S. Hold Trade Talks in Brussels
10-Mar-2014	06-30 PM	European Monetary Union	EU Finance Ministers Meet in Brussels
11-Mar-2014	-	Japan	BOJ 2014 Monetary Base Target		¥270T		0.00
11-15 Mar-2014	--	United States	U.S. House Appropriations Committee Budget Hearings
11-Mar-2014	12-00 PM	Japan	BoJ Governor Kuroda Press Conference After Rate Decision
11-Mar-2014	01-30 PM	European Monetary Union	EU Finance Ministers Meet in Brussels
11-Mar-2014	03-00 PM	United Kingdom	Industrial Production (MoM)	0.2%	0.4%	-0.20%	1.75	Neutral
11-Mar-2014	03-40 PM	European Monetary Union	ECB Main Refinancing Operation Result
12-Mar-2014	03-30 PM	European Monetary Union	Industrial Production w.d.a. (YoY)	1.9%	0.5%	1.40%	0.59	Very Good
12-Mar-2014	05-30 PM	India	Industrial Production YoY	-1.0%	-0.6%	-0.40%	2.08	Neutral
12-Mar-2014	08-00 PM	United States	EIA Crude Oil Stocks change		1.429		3.45
13-Mar-2014	06-00 PM	United States	Retail Sales (MoM)	0.2%	-0.4%	0.60%	0.63	Neutral
13-Mar-2014	10-30 PM	European Monetary Union	ECB President Draghi Speaks in Vienna
14-Mar-2014	12-00 PM	India	Wholesale Prices YoY	4.9%	5.05%	-0.15	0.46	Neutral
14-Mar-2014	07-25 PM	United States	Reuters/Michigan Consumer Sentiment Index	82	81.6	0.40	2.48	Neutral

China's First Bond Default: Copper Limit Down, Yuan Crashes Most In Six Years

Worrying headlines are beginning to mount on the back of real economic events (an actual default and a collapse in exports):

• *COPPER IN SHANGHAI FALLS BY 5% DAILY LIMIT TO 46,670 YUAN A TON
• *CHINA YUAN WEAKENS 0.46% TO 6.1564 VS U.S. DOLLAR
• *YUAN DROPS MOST SINCE 2008

Aside from that Iron ore prices are crumbling, Asian stocks are dropping, Chinese corporate bond prices aee falling at their fastest pace in almost 4 months, and all this as 7-day repo drops to one-year lows (as banks hoard liquidity).

Pushing Shanghai copper limit down...

USDCNY is tumbling as PBOC efforts to unwind the massvley one-sided carry trade appear to be getting out of control...

Copper Collapses Most Since Dec 2011 On China Credit Fears

We noted last night that Iron Ore futures prices were in free-fall as the vicious circle of China's commodity-collateral-backed shadow banking system unwind hits home amid fears of contagion from the Chaori Solar default. The first domestic Chinese corporate bond default has retail investors running scared as surprise spreads that the local government did not come to the rescue. The deleveraging is now spreading to copper prices (remember the massive cash-for-copper schemes of last year) as borrowers are forced to sell to meet cash calls which in turn drops copper prices, reducing collateral values and tightening credit conditions even more. This is the biggest copper price drop since Dec 2011...

Nickel in longest winning streak since 2010 on Indonesia ban

* Nickel is top performing metal in 2014, up 11.5 pct

Nickel held near nine-month highs on Friday, heading for a seventh session of gains in what would be its longest rally since October 2010, with global supply tightened by Indonesia's ban on ore exports.

Nickel is the best performing base metal this year with a gain of more than 11 percent. The more-traded copper has lost 4.4 percent amid signs Chinese demand may slow as the top user of the metal eyes a less-investment driven economic expansion.

Three-month nickel on the London Metal Exchange was up 0.2 percent at $15,497 a tonne by 0327 GMT, heading for a seventh session of gains that would mark its longest rally since an 11-day stretch in September-October 2010.

The metal, used in making stainless steel, touched $15,562 on Thursday, its highest since June 3. Nickel has gained 5.3 percent for the week, its fifth straight weekly rise.

Around $500 million a month in ore and concentrate exports have stopped since Indonesia in January imposed new mining rules that included a ban on nickel ore exports. The country was previously the world's top exporter of the metal.

China, the world's top buyer of nickel ore, is likely to be the most hurt from the ban and its stockpiles may soon run out.

"In the near term, there will be no supplier that would be able to replace Indonesia and Chinese stainless steel producers may be forced to import refined nickel which will increase their cost," said Helen Lau, senior mining analyst at UOB-Kay Hian Securities in Hong Kong.

"This will create a lot of demand for nickel and send prices even higher," said Lau, who sees the metal easily topping $16,000 a tonne, a level last seen in April 2013.

The only other viable source of nickel ore for China would be the Philippines, but the lower quality of the ore there will push up the cost for producers of stainless steel. [ID:nL6N0LX2II]

LME copper slipped 0.3 percent to $7,032 a tonne, but is set of finish the week up marginally.

Lau said she sees copper averaging at $6,850 this year, reflecting slower economic growth in China as Beijing shifts to a consumption-driven expansion, which would curb its demand for the industrial metal.

China's economic planner, the National Development and Reform Commission, told parliament on Wednesday that the government will target 17.5 percent growth in fixed-asset investment this year, the slowest in 12 years. [ID:nL3N0M21ES]

The most-traded May copper contract on the Shanghai Futures Exchange eased 0.2 percent to 49,090 yuan ($8,000) a tonne.

Investors are also eyeing the U.S. jobs data due later on Friday that is forecast to show a 150,000 increase in employment in February, up from 113,000 in January and 75,000 in December. That growth may be enough to keep the Federal Reserve on its stimulus tapering path. [ID:nL1N0M01H4]

The U.S. economic outlook would have to change dramatically for the Fed to alter the pace at which it is winding down its massive bond-buying program, three top U.S. central bankers said. 

LME Copper to average $7,014 a ton this year: Bank of America Merrill Lynch

LME copper prices to average $7,014 a ton this year , said Bank of America Merrill Lynch, but has a weaker forecast of $6,750 for the second quarter.The American bank said that it anticipates a small supply surplus in 2014. Analysts also point out the metal has fallen year-to-date despite strong import data from key commodity consumer China. The availability of copper in the country appears better than the rest of the world.

“This has perhaps been best reflected in price differentials between the London Metals Exchange and the Shanghai Future Exchange, which do not incentivize copper imports at present,” said the analysts at Bank of America Merrill Lynch.

Analysts said that they are concerned that China's government may focus on checking the credit growth from recent years.

“In our view, there is a risk that a credit event may further reduce China's commercial copper purchases,” said the American bank, adding it is maintaining its second-quarter forecast of $6,750 a ton, or $3.06 a pound.

Recent Russia-Ukraine crisis may impact several commodities

The political tensions surrounding Russia and Ukraine have potential to impact markets for a number of commodities, said Deutsche Bank in a snippet.

According to the German Bank, exports of commodities account for around half of Ukraine’s gross domestic product. Key commodity exports include agriculture, chemicals, metals and timber.

Meanwhile, Europe depends on Russia for about 30% of its gas supply. Deutsche Bank points out that gold has benefited from safe-haven flows due to the crisis.

“If there are international efforts to impose sanctions on Russia, then this could start to impact the PGM (platinum group metals) sector and specifically palladium given Russia is the world’s largest producer of palladium and given its large holdings of above-ground stocks,” said the analysts at Deutsche Bank, via Kitco News. “Nickel, oil and aluminum could also be affected.”

“However, of the major metals aluminum is probably the most oversupplied which may limit price implications from any sanction induced supply disruption,” Deutsche Bank added.