What Makes Jones Act Jones Act ?
What Makes Pipeline Pipelines
What Makes Rail Rail ?
What Make FFVs FFVs ?
When discussing U.S Flagged Shipping, the Foreign Flag Tanker freight is often put on the same line with the U.S pipelines connecting the U.S Gulf with the East Coast refineries but the market element and contractual elements are often against the idealogical wisdom… Continue reading →
Dunkley’s Cold Fusion [Just Brillant] What links global physical market, futures market, producer countries capital flows and their currencies. Defining the variables: 1. D= Global Demand 2. S= Global Supply (Cost Curve) 3. IR= World Interest Rate 4. Toil = … Continue reading →
Twenty-two years at sea have earned Captain Andrew Smiley adventuresome tales to tell. Though anchored ashore for the past 14 years, his work is still in the water, moving products around the world. As vice president of shipping for Koch Supply and Trading, he manages the technical operations of 85-90 chartered ships at any given time. Continue reading →
Conceptually, traders arbitrage price differences until markets have equal basis adjusted for shipping costs. In fact, location arbitrage is a “trading strategy to profit from market inefficiencies in price differences” Continue reading →
The case of Noble Group has stimulated industry participants and investors with mutual interests in commodity markets.
Academics at the National University of Singapore now take part in this effort to constructively address the credit, liquidity and solvency concerns of Asia’s largest commodity trader.
Kingsman has this ability to bring complex-issues and fact situations regarding food and sugars into a non-trader lingo format accessible for an intelligent discussion between the policy makers, the industry and the public.
If Sugar is a Casino, then who sets the odds ?
Farmers, Weather, Millers, Trade houses, Governments ?
By 2040, our planet will be expected to support more than 9 billion people with twice today’s food demand.
Not only is there increasing uncertainty about food security with the climatic changes risk, demand for income growth will be expotential. An highly complex and the elaborate set of global trade policies will complicate matters further business decisions. Continue reading →
★★★★★”Our balance sheet – the strongest in recent history – represents a significant advantage as we continue to identify high value growth opportunities across the products and geographies we operate in. Maintaining our investment grade rating with the international rating … Continue reading →
Nowadays Hong Lim park is so quiet, no one bother to protest for our fellow Singaporeans !
Noble Group, the commodity trader listed on the SGX, is in a class apart mainly because their model assumptions and the financial reporting of commodity contracts and derivatives. Perhaps, Antoine Lavoisier, French nobleman of the 18th century and father of modern chemistry must have a great influence on the financial reporting of Asia’s Largest Commodity trader with Nothing is lost, nothing is created, everything is transformed. Noble Group has always had problems but now it seems they are taking some epic proportions. Continue reading →
S&P has given Noble a deadline of three months in which to raise a lot of capital, or else be downgraded to BB-, junk status. In addition to the warning by S&P, we are concerned about Noble Group’s financial reporting and realization of gains on commodity contracts, derivatives during Q3-2015. Excluding Derivatives MTM, Noble Group’s adjusted working capital is down to 685 million -47% from 3 months earlier.
Working capital has been reduced twice as much as their sales, essentially temporarily lowering their inventories and allowing its books amount of cash to show a positive amount.
The reported 500M$ gain on the oil hedge is not seen justified by the normal course of their hedging activity and was more likely to cover their working capital shortfall. We currently have a SELL on the stock with a price target of S$0.10.
Source: Commodity Merchant Trading and Shipping Advisory Services CMTSA Research- 23 Nov 2015 Continue reading →
In “The Politics of the Grains: a Canadian Experience” explains why in Western Canada, farmers are deeply suspicious of the business practices of the grain companies and hostile to their positions of power, alluding to trust, the single most important concept behind any commodity trade.(Commodity Traders are providers of Trust…)
The article has also highlighted the socioeconomic factors explaining why somewhere in the political process of the early 30’s, Westerners have pushed for centralization and for more government intervention in the market. Continue reading →
As incomes have risen across Asia, people there have improved their diets, including eating more meat. China’s increasing consumption of animal protein has fueled the demand for soybeans, as soybean meal is a key ingredient in animal feeds. In 2004, China imported 9.4 million metric tons of soybeans from the U.S. By 2014, its U.S. soybean imports had more than tripled to 31.3 million metric tons. Continue reading →
The Weather Department received hourly observations for 10,000 cities worldwide, as well as telex reports and satellite maps from national weather services.
Weather technicians sorted through volumes of data, relaying relevant observations to various business divisions worldwide.
Cargill’s salt business, for example, tracked where the next major snowstorms would hit, enabling them to supply sufficient amounts of road salt to those locations, while Sunny Fresh Eggs, now Cargill Kitchen Solutions, used daily temperature readings to adjust the feed mixture for its layer hens. Continue reading →
Since nearly as much fuel and time were needed to make the return trip, whether the barge was loaded or empty, backhauling helped maximize hauling efficiency and created another revenue opportunity for Cargill.
And in the case of salt, it gave rise to a new, highly profitable industry for the company. Continue reading →
In 1932, Cargill builds the world’s then-largest terminal in Albany, New York, making it easier to move grain to the Great Lakes, the Atlantic and beyond. HEADS TO THE ATLANTIC As European customers establish offices in the US to cut … Continue reading →
On September 30, 2012, agents from the FBI contacted U.S. Customs and Border Protection at O’Hare International Airport in Chicago with an urgent request. They wanted bags from two passengers on an outbound flight to Beijing pulled for immediate inspection. The passengers didn’t track as dangerous criminals: Li Shaoming, president of Beijing Kings Nower Seed Science & Technology, a large Chinese agricultural company that develops corn, rice, cotton, and canola seeds, Continue reading →
In 1922, a Russian-Jewish immigrant named Dr. Julius Hendel came to Cargill in search of a job.
Hendel was an expert in grain, well on his way to becoming one of the first in the United States to hold a doctorate in an agribusiness-related field.
He also shared the same adventurous spirit as John MacMillan, Jr., Cargill’s vice president at the time. Continue reading →
We maintain the call made in Noble Group’s Kurtosis Awakening Moment for the Commodity Markets in which we profiled the ongoing fast-motion trainwreck of Asia’s largest commodity trader. Continue reading →
PBF Energy – has recently crafted an unorthodox trade: Delivering a 500,000 bbls Kearl Lake cargo (Albertan) to Philadelphia through Panama by LR2 tanker.
It is a move that you would normally expect from guys like Freepoint Commodities, (not PBF). Continue reading →
According to Goldman Sachs Asset Management. ETFs have a very transparent portfolio holding and predefined creation basket. This allows arbitrageurs to create and redeem units every day through the in-kind creation / redemption mechanism. Such arbitrageurs are always in the market to take advantage of any significant premium or discount between the ETF market price and its NAV by doing arbitrage between the ETF and its underlying portfolio. Thus, the open architecture of ETFs ensures that there is no significant premium or discount to NAV. At the same time, additional demand / supply is absorbed due to the action of the arbitrageurs. Continue reading →
[IN FEBRUARY 2015, ICEBERG RESEARCH ISSUED A REPORT ALLEGING, AMONG OTHER THINGS, THAT: (I) NOBLE GROUP EXPLOITS THE ACCOUNTING TREATMENT OF ITS ASSOCIATES TO AVOID LARGE IMPAIRMENTS AND FABRICATE PROFIT; AND (II) CONTRARY TO WHAT NOBLE GROUP’S MANAGEMENT CLAIMS, THE … Continue reading →
In trading, there is a time lag between the shipment of products by an exporter and their arrival by the importer depending on the duration of a voyage. Normally, exporters will require payment upon loading, whilst importers ideally would delay payment until arrival. In its simplest form, trade finance is bridging this timing lag by providing a short-term credit facility. This activity is intermediated by banks and also collateralized by the underlying cargoes as well as by additional export guarantees. Continue reading →
Shipping is not a boring activity, it has always attracted ultra-smart and passionate types. Martin Stopford is a Brit Economist and the Mastermind behind Clarksons Research, part of Clarksons group. He is a sophisticated and Smart type with formidable intellectuals. Continue reading →
Simplifying how oil traders make deals on various freight transactions terms.
Have you ever wondered about the meaning of commodity trading terms, or Incoterms? FOB…DES…DDP. Say What?!?
Incoterms were established by the International Chamber of Commerce (ICC), a non-governmental organization, to standardize the interpretation of major trade terms.
Sales contracts using Incoterms define the obligations and risks of both the seller and the buyer. The obligations cover the period while the merchandise is in transit, whether by land, sea, air or a combination of modes. Continue reading →
The shipping trade is nested by an ancillary web of commodity sale & purchase contracts crafted by traders to create “the ultimate trading optionality”actionable unto the smallest decision timeframe possible !
Disputes arise when the liabilities and risks of such trade innovations are not carefully apportioned in the S&P contracts. Moreover some organizations exert an operational veto on the commercial operations of others because of physical/logistical constraints and in some case because of their natural bottleneck monopoly. Continue reading →
Recently, a solid MISPRICING has appeared in the RIN market with D5 RIN (the RIN for advanced cellulosic ethanol have become expansive vs E100 and Gasoline( shortly after the EPA issued RFS and during pending changes for Brazil tariff on foreign imports). A major U.S IB has brought Brazil Ethanol to blend ethanol to generate the RIN, then separate it and cash-out the credit attached. Continue reading →