2006年商品期貨投資回顧和2007年投資展望(轉貼)

 

2006 ends on a sour note for commodities

Top picks for 2007 include uranium, corn and orange juice, say analysts

By Myra P. Saefong, MarketWatch

Last Update: 12:01 AM ET Dec 19, 2006

SAN FRANCISCO (MarketWatch) -- It was a year to remember for commodities with crude, copper and platinum futures reaching -- then falling -- from never-before-seen levels. But uranium, corn and oranges will likely be among the resources to take the spotlight in 2007, analysts said.

Overall, "2006 was a year of dissonance for the commodity markets," said Todd Hultman, president of DailyFutures.com, a commodity news and information provider.

The front-month contract for crude futures climbed to a record of nearly $78 a barrel in mid-July on the New York Mercantile Exchange, but failed at reaching the $100 price levels some had expected as early as this year.

Natural-gas futures didn't rise past the nearly $16 per million British-thermal-unit all-time high it reached in mid-December of last year. In fact, they've lost more than half their value since then.

In May, gold futures reached a 26-year high well above $700 an ounce, but was well short of the $1,000 target some experts were shooting for.

Copper futures tapped a record above $4 a pound, platinum reached an all-time high above $1,300 an ounce and silver climbed to a more than two-decade high above $15, following the launch of the first silver exchanged-traded fund. All three metals are poised to end the year below those levels, though still significantly higher for the year.

But some of the commodities to watch for next year will be the rising stars from this year.

Corn futures have climbed more than 40% from the end of last year, driven by demand for ethanol.

"Five years from now, we will look back and identify 2006 as the year that the world woke up to the mergence of ethanol as a significant fuel," said Hultman. Read archived story.

"Barring a major international incident, the perpetual shortage of crude oil and expansion of the ethanol industry will likely be the major stories for the rest of this decade," he said.

And don't forget the orange juice. The 2005 hurricanes and ongoing crop diseases in Florida have kept the orange crops "very small," said Phil Flynn, a senior analyst at Alaron Trading. "We're just one big shortage from driving these prices a lot higher."

But Sean Brodrick, a senior editor at MoneyandMarkets.com said the ultimate commodity bet for 2007 will be uranium, whose market suffers from growing demand and a severe supply deficit.

Energetic moves

The energy markets began the year still reeling from the effects of Hurricanes Katrina and Rita on oil and natural-gas production in the Gulf of Mexico but barring unforeseen events, lower prices may be on tap for 2007.

Analysts' predictions for $80 -- even $100 -- oil prices were rampant at the start of 2006. See a related Commodities Corner.

Instead, "2006 was that year when nearly $15 of purely speculative premium just evaporated from the market, bringing it down from $78 to $58 in a span of three months," said Rakesh Shankar, an economist at Moody's Economy.com.

The lack of disruptive hurricanes in the Atlantic were partly to blame for the price decline. See full story.

Even so, crude prices are still hovering around $60 a barrel, Frank Holmes, chief executive officer of U.S. Global Investors, implying that prices are still at high levels. Demand from China and India are to blame, he said, dubbing the phenomenon "Chindia."

"It is a given that the requirements of India and China for oil will continue to increase at double-digit percentages," said Charles Perry, chairman at energy-consulting firm Perry Management.

Indeed, Holmes said that with "Chindia" growing at 10% and the U.S. growing at less than 3%, "the tipping point has already taken place," Holmes said. Hear an interview with Holmes.

Given the growth in Chindia, he said he'd be surprised to see oil prices fall under $45 on the downside, and "any type of geopolitical event could take them to $85, $90."

Similarly, John Person, president of National Futures Advisory Service, said that without supply disruptions from terrorist attacks, hurricanes or refinery outages, prices will stay above $45 in 2007.

And with the lack of Gulf Cost hurricanes this year and "less refinery maintenance this winter and spring than in the last few years," retail gasoline prices in 2007 won't likely surpass the $3.03 a gallon it reached in August, or the record $3.057 it saw in 2005, said Tom Kloza, chief oil analyst at the Oil Price Information Service.

But if the crude market "sees any hints of such potential supply disruptions, then we could easily top $85 to $100 per barrel [for crude] in 2007," said Person.

"There is still some speculative premium in the market that moderate demand and higher supply will help deflate as the year progresses," Shankar said. He expects crude prices to fall to $55 by the end of 2007 and to $45 by the end of 2008.

As for natural gas, Shankar expects prices to stay in the $6 range through 2007 because of slow growth in additional supplies. Then the opening of several new liquefied natural-gas terminals in 2008 will help drive prices for the fuel "lower some" after 2008.

Metals shine then dull

For the metals markets, it was quite a roller coaster as well. Gold and silver hold promise -- others, not so much.

Gold made an eye-opening rise to more than $700 an ounce, with most analysts blaming the weaker dollar and expectations for more weakness in the greenback, as well as uncertainty surrounding the state of the economy.

The "gold market rally got ahead of itself," said Peter Spina, a chief investment strategist at GoldSeek.com.

But in the first half of next year, the market will "probably move back to the prior highs we saw in early 2006," he said. And if prices can move above the low $700s, the market will likely be looking at $800, $850 an ounce. See an interview with Spina.

In the meantime, silver's "more attractive right now ... really setting itself up for a move to the $18 to $20-an-ounce mark by early next year and potentially move up to $25," said Spina. See archived story.

Ned Schmidt, editor of the Value View Gold Report, expects silver to reach $15 sometime in January and gold to trade between $750 and $775 at the end of 2007.

Copper's another story. "Look out for supply restrictions, not demand," said Holmes. "That's the biggest factor right now." See related story.

But "for the first time in recent memory, both consumption and imports fell in China," said Peter Grandich, editor of the Grandich Letter. Given that, he expects copper prices to stay between $3-$3.40 until the end of this year.

"Next year, look for a price below $2.50," he said.

Platinum's outlook isn't much rosier. While speculation over the launch of a platinum exchange-traded fund has died down, any short-term price rise "from such an event becoming real would be a net negative for platinum as users would look to switch to palladium," said Grandich.

Hot commodities

Of all the metals, the one with some of the most potential in the coming year is the one many analysts have been endorsing as alternative energy climbs in popularity.

For uranium, "$100 [is] a question of when, not if," said Grandich.

Spot prices trade above $60 a pound, up from around $43 six months ago, according to data from Ux Consulting Co.

It's the basic material for nuclear technology, and supplies fall far short of meeting global demand as the world seeks alternatives to oil as a source of energy. See uranium story.

"There was a 42 million-pound short fall this year," said Brodrick. "You want to bet on one commodity in 2007? Make it uranium."

Also benefiting from the rise in alternative energy sources is the demand for ethanol, which will translate into a boom for corn, a key source for the fuel. See related story.

There are actual "twin demands" on corn -- for ethanol and to feed an "increasingly hungry world," said Brodrick.

And with a shift in acreage to corn and wheat, "cotton acres will shrink," said Thomas Hartmann, an analyst at Altavest Worldwide Trading, and bean oil may benefit from the shift away from soybean acres.

Oranges are also a market not to be ignored in the coming year. Frozen concentrated orange-juice futures touched at their highest level in more than 15 years, and are ready to log a more than 50% gain for the year.

In mid-December, the U.S. Department of Agriculture estimated Florida's 2007-2007 orange crop at 140 million boxes.

"If that estimate holds, it will be Florida's smallest orange crop in 15 years," said Dailyfutures.com's Hultman, adding that as of Dec. 2, inventories of frozen concentrated orange juice were down 40% vs. a year ago, according to the Florida Department of Citrus.

Wrapping up the year

All told, traders are in for an interesting year ahead.

"2007 may well be the year when mainstream investors rediscover hard assets," said Jon Nadler, an investment-products analyst at bullion dealers Kitco.com. "Precious metals, especially gold, will make headlines that we have not seen for a generation."

And the markets will realize that "this is not a bubble or a short-term phenomenon" they've seen in gold, said Lawrence Roulston, editor of investment newsletter Resources Opportunities. "The high metals prices are going to be here for some time yet." Hear an interview with Roulston.

There has been a "massive transfer of wealth and manufacturing to the East, as well as wealth," points out Julian Phillips, an analyst at GoldForecaster.com.

In the meantime, "the demand for commodities ... is swamping the commodities markets that cannot respond to the rise in demand quick enough," he said.

"Next year is sure to be a very eventful year," Phillips said.