Source: CFTC, Bloomberg, Commerzbank Corporates & Markets research.commerzbank.com Bloomberg: CBIR

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1 Commodity Research Commodities Daily Investors undecided, prices defending their gains Energy: As the new week of trading gets underway, Brent is holding its own above the $12 per barrel mark and is therefore defending its gains from Friday. The Chinese prime minister has announced plans for economic stimulus measures, which is lending support to the price. What is more, Iran has stated that it will be scaling up its military presence in the Strait of Hormuz, through which 2% of seaborne crude oil is transported. Despite an oil pipeline having been put into operation in the United Arab Emirates, a blockade would still cut large parts of the oil production in the Gulf states off from the world market, which justifies a risk premium on the oil price. Market positioning data published by the CFTC for the week to 1 July showed that speculative net long positions in WTI had decreased by 6.2 thousand to 17,72 contracts. This puts them at a comparatively low level, which suggests that a bottom could be formed, followed by a price recovery. The corresponding figures for Brent are due to be published this lunchtime. In the case of US natural gas, there are now net long positions of 57.9 thousand contracts in the futures plus swaps category in mid-april there were still net short positions totalling nearly 7 thousand contracts. The increase in the price of US natural gas in recent months is thus attributable to a major extent to a shift in sentiment among money managers. In view of the almost record-high net long positions, we believe the upside potential of natural gas to be virtually exhausted. Precious metals: Gold is defying the firm US dollar at the start of the week and is defending the gains it achieved late last week. As the new week of trading gets underway, the yellow metal is trading at around $1,59 per troy ounce. In euro terms, gold has been riding for a time above the 1,3 per troy ounce mark, its highest level in more than five weeks. In India, formerly the world s largest gold consumer, the wholesale price inflation in June decreased further to 7.3%. This gives the Indian central bank scope to lower interest rates further at its next meeting at the end of the month, which would have a positive impact on gold. That said, the World Gold Council (WGC) assumes that Indian gold demand this year will be down for the second year in a row. According to the WGC, Indians are generally cutting their spending and preserving their liquidity in view of the economic cooldown and the uncertain prospects for the future. What is more, there is less money available for buying gold as a result of a poorer than expected monsoon season. So far, weaker gold demand in India has been offset by high rates of gold buying in China. In the week to 1 July, speculative financial investors reduced their net long positions in gold by 15.9 thousand to 8.3 thousand contracts, thereby more or less completely negating the previous week s increase again. CHART OF THE DAY: Financial investors facilitate increase in natural gas price 8 ' contracts 6 16 July 212 Speculative market positioning (net) 1-Jul contracts Weekly change WTI Henry Hub Gasoline Gold Silver Platinum Palladium Copper Wheat Corn Soybeans Cotton Coffee Cocoa Sugar Source: CFTC, Bloomberg Head of Commodity Research Eugen Weinberg eugen.weinberg@commerzbank.com Carsten Fritsch carsten.fritsch@commerzbank.com Barbara Lambrecht barbara.lambrecht@commerzbank.com Michaela Kuhl michaela.kuhl@commerzbank.com Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 Net short positions managed money (futures and swaps), ls Henry Hub (US$/mmBtu), rs Daniel Briesemann daniel.briesemann@commerzbank.com Source: CFTC, Bloomberg, Commerzbank Corporates & Markets research.commerzbank.com Bloomberg: CBIR For important disclosure information please see last page

2 Base metals: As trading resumes this morning, metal prices are defending their gains from the end of last week despite weak Chinese equity markets and a firm US dollar. Citing prime minister Wen Jiabao, state Chinese news agency Xinhua reports that the efforts to stabilize the economy are working and that the government plans in the second half of the year to step up its efforts to increase policy effectiveness and foresight. In a pilot project, the central government is making CNY 32 billion (equivalent to a good $5 billion) available to four million impoverished households to enable them to renovate their decrepit houses. Although it may not be officially designated as such, this can certainly be regarded as an economic stimulus programme. Further programmes of this kind are likely to follow, thus keeping demand for metals at a high level. As anticipated, speculative financial investors again expanded their net short positions in copper in the week to 1 July, increasing them by 3.1 thousand to 4.8 thousand contracts. In effect, this reverses part of the short covering from the previous week; at the same time, the increase was majorly responsible for the good 4% decrease in the price of copper in the period under review. That said, the data series has shown itself to be highly volatile in recent weeks, and the rise in the copper price after the reporting date would suggest that net short positions have meanwhile been reduced again. Agriculturals: In view of the risks to supply, speculative financial investors are pinning their hopes on rising prices. The CFTC s data show that speculative net long positions in wheat and corn were significantly expanded again in the week to 1 July. Net long positions in corn were increased four-fold to thousand contracts within four weeks. In wheat they climbed to nearly 55 thousand contracts, their highest level since March 28. Less than two months ago we saw just as many net short positions which at the time represented the highest level since mid-june 21, before the wheat price exploded on the back of the Russian export ban. Unlike two years ago, the shockwave which is currently hitting the grain markets originated on the corn market. Despite the expected production shortfalls, there is no export ban in sight in the Black Sea region. The market for raw sugar also shows a strong increase in net long positions, which climbed by over 4 thousand contracts to 17.6 thousand contracts, the highest figure since April. In the case of sugar, heavy rainfall in Brazil is currently weighing on sentiment as it is hampering harvesting and thus delaying exports. The coffee crop is also being negatively affected by this here, speculative net short positions in the reporting week were halved to 5.7 thousand contracts as compared to the previous week. Prices Energy 1) current 1 day 1 week 1 month 212 Brent Blend % 1.8% 4.7% -5% WTI %.8% 3.1% -12% Gasoline % -.8% 6.1% 6% Gasoil % 1.3% 3.3% -5% Diesel %.9% 4.4% -3% Jet fuel % 2.4% 4.1% -4% Natural gas 2.87.% -.5% 16.3% -4% Base metals 2) Aluminum % -1.% -1.4% -6% Copper % 1.5% 2.2% 1% Lead %.% -2.4% -8% Nickel % -1.8% -4.4% -14% Tin % -.6% -5.1% -3% Zinc %.6% -2.% 1% Steel 45.% 4.2% 2.4% -2% Precious metals 3) Gold % -.1% -2.5% 1% Gold (EUR) %.6%.% 8% Silver % -.6% -5.2% -2% Platinum % -1.2% -3.9% 2% Palladium % -.3% -7.1% -11% Agriculturals 1) Wheat MATIF % 6.2% 25.8% 28% Wheat CBOT % 5.2% 42.9% 33% Corn % 5.2% 32.9% 19% Soybeans % 1.4% 18.4% 36% Cotton % 1.7% -1.5% -22% Sugar % -.3% 8.6% -3% Coffee Arabica % 2.2% 24.2% -18% Cocoa % -4.3%.% 5% Currencies 3) EUR/USD % -.7% -2.8% -6% Inventories Energy * current 1 day 1 week 1 month 1 year Crude oil % -1.7% 6% Gasoline % 2.1% -2% Distillates %.7% -17% Crude oil Cushing % -2.1% 24% Natural gas % 9.% 2% Gasoil (ARA) % -1.1% -13% Gasoline (ARA) % -.3% 3% Base metals ** Aluminum LME % -.6% -1.% 9% Shanghai % -4.9% 41% Copper LME % -.7%.9% -46% COMEX % -3.8% -12.7% -38% Shanghai % 21.5% 47% Lead LME % -1.3% -.5% 11% Nickel LME % 2.% 3.4% 4% Tin LME 1295.% -3.9% -.7% -43% Zinc LME %.% 4.2% 11% Shanghai % -1.9% -18% Steel LME 4275.% 51.7% 51.7% -8% Precious metals *** Gold % -.3%.9% 11% Silver %.3% 1.1% 7% Platinum 1345.%.% 1.9% -2% Palladium 1939.%.% -1.4% -1% Source: DOE, PJK, LME, COMEX, SHFE, Bloomberg, Commerzbank Corporates & Markets Percentage change on previous period 1) 1 month forward, 2) 3 months forward, 3) spot * US inventories of crude oil and oil products in barrel, US natural gas inventories in billion cubic feet, ARA stocks in tons ** tons, *** ETF holdings in ounces 2 16 July 212

3 Net long positions of money managers vs. price GRAPH1: Crude oil (WTI) ' contracts Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 spec. net long positions, ls WTI ($/barrel), rs GRAPH 3: Gold ' contracts Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 spec. net long posit., ls Gold ($ per troy ounce), rs GRAPH 5: Copper ' contracts Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 spec. net long positions, ls Copper ($/ton), rs GRAPH 2: Natural gas (Henry Hub; futures and swaps) 8 ' contracts Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 spec. net long posit., ls HenryHub ($/MMBtu), rs GRAPH 4: Silver 5 ' contracts Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 spec. net long posit., ls Silver ($ per troy ounce), rs GRAPH 6: Wheat 6 ' contracts Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 spec. net long posit., ls Wheat (c per bushel), rs GRAPH 7: Corn GRAPH 8: Sugar ' contracts ' contracts Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 spec. net long posit., ls Corn (c per bushel), rs 1 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Jul-12 spec. net long posit., ls sugar (c per pound), rs 16 July 212 3

4 GRAPH 9: Forward curve oil market (WTI) 9 GRAPH 1: Forward curve oil market (Brent) Source: NYMEX; Bloomberg, Commerzbank Corporates & Markets GRAPH 11: Forward curve gas market (Henry Hub) Source: NYMEX; Bloomberg, Commerzbank Corporates & Markets GRAPH 13: Forward curve aluminium (LME) GRAPH 15: Forward curve Nickel (LME) Source: ICE; Bloomberg, Commerzbank Corporates & Markets GRAPH 12: Forward curve gasoil (ICE) M 8M 15M 22M 29M Source: ICE; Bloomberg, Commerzbank Corporates & Markets GRAPH 14: Forward curve copper (LME) GRAPH 16: Forward curve zinc (LME) M 8M 15M 22M M 8M 15M 22M 4 16 July 212

5 GRAPH 17: Forward curve lead (LME) GRAPH 18: Forward curve tin (LME) M 8M 15M 22M 185 1M 4M 7M 1M 13M GRAPH 19: Forward curve wheat (CBOT) Source: LME, Bloomberg, Commerzbank Corporates & Markets GRAPH 2: Forward curve wheat (MATIF) M 9M 13M 18M 23M 4M 6M 8M 1M 17M 19M Source: CBOT; Bloomberg, Commerzbank Corporates & Markets GRAPH 17 Forward curve corn (CBOT) Source: MATIF; Bloomberg, Commerzbank Corporates & Markets GRAPH 22: Forward curve soybeans (CBOT) M 11M 18M 25M 37M 11 1M 7M 13M 17M 23M 27M 41M Source: CBOT; Bloomberg, Commerzbank Corporates & Markets GRAPH 23: Forward curve cotton (NYBOT) Source: CBOT; Bloomberg, Commerzbank Corporates & Markets GRAPH 24: Forward curve sugar (NYBOT) M 1M 15M 2M 25M 3M 19. 3M 1M 15M 22M 27M 34M Source: NYBOT; Bloomberg, Commerzbank Corporates & Markets Source: NYBOT; Bloomberg, Commerzbank Corporates & Markets 16 July 212 5

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