Unless otherwise indicated, the material below has not been prepared by Van Eck Associates Corporation or HardAssetsInvestor.com.
Neither assumes any liability for any content on a third-party website or material prepared by a third party.
HardAssetsInvestor
- ENERGY
- PRECIOUS METALS
- BASE METALS
- AGRICULTURAL
- SOFTS
- Alternative Energy
- STRATEGIC/RARE EARTH METALS
MOST POPULAR ARTICLES
-
2012 Gold Price Report: Miners See Peak Gold Price Of $2,000/oz This Year
-
Record Natural Gas Glut Sends Prices To 10-Year Lows, Is It Time To Buy?
-
Video: David McAlvany Sees China And India Calling Shots On Gold And Silver
-
Gartman Starting To Turn Neutral On Gold
-
Week In Review: Gold & Silver Surge To Continue After Breakout, NatGas Bottom May Be In
***Top stories from the last 15 days
- Written by Administrator |
- October 07, 2008
Copper And Corn
- Details
Page 1 of 4
Kevin Kerr talks with Associate Editor Dave Nadig about the depressed state of base metals and the ethanol dilemma in corn.
Dave Nadig, assistant editor, HardAssetsInvestor.com (Nadig): Hi, this is Dave Nadig, assistant editor of HardAssetsInvestor.com. I’m very pleased this week to introduce a new feature for HardAssetsInvestor.com readers: the Hard Assets Investor Weekly Trading Update, with Kevin Kerr. Kevin is one of the most recognized traders in U.S. commodities. He is the editor of the Global Commodities Alert, available at www.kerralert.com, and he is a frequent television commentator on commodities trading. | |
| Kevin’s going to join us each week to take a quick survey of the commodity investing landscape from a trader’s perspective. If you have any questions, feel free to e-mail us at
This e-mail address is being protected from spambots. You need JavaScript enabled to view it.
. |  |
| Kevin Kerr, KerrAlert.com (Kerr): Well, good to be here, thank you. Nadig: So Kevin, I have to tell you: I was reading the papers and checking my wire, and what the heck is going on with copper? As far as I can figure out, this is about the most dismal time to be in base metals in recent memory. Kerr: Yeah, we’ve really seen a big pullback in all the base metals. All the things that have surged over the last few years have really pulled back with this global slowdown, and I think it’s unprecedented in this pullback. So we have to really take a deep breath and try to figure out where we go from here. Nadig: But how real is it? Certainly we’ve seen a lot of headlines and a lot of analysts talking about the end market demand just going away, like China never happened and nobody is ever going to build a house again or put in any plumbing. How real is the demand and how much of this is really just market panic? Kerr: No, I totally disagree with that analogy. I think that the demand is still there. What we’re seeing is a liquidation of a lot of the assets of these funds that have climbed into commodities. They’ve quickly had to withdraw their cash and will probably come back just as quickly. So I really wouldn’t get too bearish on a lot of the fundamental commodities. Oil, the base metals, the grains … a lot of these commodities we will probably see recover fairly quickly. I really just don’t buy in to the whole idea that this was a bubble; that this is the end. I think it’s actually just a fraction that was probably overdue and there are actually some good buying opportunities now. Nadig: So if this is funds [causing the downturn], I assume you’re really talking about hedge fund players more than anything here, right? Kerr: We are, yeah, of course. A lot of these funds have been pressured to take their cash off the table, rein in the spending and kind of reassess. When they reassess, I think they will see that the value of a lot of the commodities that they bought is still there and probably even cheaper now. So we probably will see that money come back in within the next six to 12 months, no doubt about that. Nadig: So let’s spin a tale. I’m a hedge fund manager, I’ve been playing copper really heavily. Maybe I rode it up perfectly until the peaks earlier this year, and now I’m capitulating and I’m pushing these assets back out into the market. Would we expect to see that really show up in things like the LME [London Metals Exchange] stocks levels, or is this just going to be the kind of thing that we see mostly in the futures markets? Kerr: I think in the physical market you won’t see it as much. I think you will definitely see it in the futures markets. You’re seeing the pressure already across the board in aluminum and copper and everything, and you will continue to see that until those margins are covered. The bottom line is a lot of these buyers will come back in when those base metals bottom out. I think we’re getting close to that. I think it may have further to go. The fear of an industrial slowdown is affecting everything from silver to copper and everything in between. But at some point you will see value buying come back in. Like I say, it’s about probably six months out.
| |
Related Reports
Related Videos
Related Interviews
Latest News
- Morning Call: Gold Steadies As China Inflation Picks Up, UK Expands QE Program; Brent Tops $118
- Market Wrap: Gold ($1729), Silver ($33.81) Fall On Profit-Taking, Brent And WTI Diverge After Inventory Report
- Morning Call: Gold ($1747), Silver Advance; Copper Near 4½ Month Highs Amid Economic Optimism
- Market Wrap: Gold Surges Back From Earlier Losses, Brent Hits 6-Month High At $117.50, WTI Finally Rallies
- Morning Call: Gold Eases On Greece Worries, Brent Hits Fresh 6-Month High As WTI-Brent Spreads Top $20