Briefly: “Scotia Commodity Index rallies again” and more news

By Staff | October 26, 2010 | Last updated on October 26, 2010
4 min read

Scotiabank’s Commodity Price Index which studies the price trends of Canada’s major exports, rose 0.6% in September. The improvement is attributed to the gains made by base and precious metals, grains and fertilizers. The Metal & Minerals Index led the charge, climbing 4.1% m/m, driven by surging copper prices.

Besides the ongoing strength in China’s raw material demand, the report singles out a drought across the spring wheat and barley growing region of former Soviet states last spring and tight U.S. corn supplies and expectations for a further round of Fed quantitative easing to revive the U.S. economy and head off deflation, as the reasons for the surge.

Metals and Minerals

  • widespread strength in base and precious metals, gains in steel-alloying agents (molybdenum and cobalt) and surging sulphur prices at the Port of Vancouver (used in DAP fertilizer).
  • spot uranium prices also edged up from US$41.50 per pound in mid-July to US$48 in mid-September.
  • spot potash prices (FOB Vancouver) were largely unchanged in September at US$342.50 per tonne (standard grade) — treading water since the beginning of 2010.
  • Brazilian potash imports have climbed by 101% over the year.
  • precious metals have also outperformed, with spot gold prices reaching a new record high of US$1,387.35 per ounce on October 15.

    Oil And Gas The only sub-component to decline in September, falling 7.4% m/m. WTI oil prices lost ground in September, easing to US$75.55 per barrel on concern over a sub-par U.S. economic recovery and slowing global growth. However, prices have rebounded back to almost US$82 so far in October alongside a weak U.S. dollar.

    Forest Products The Forest Products Index also edged higher by 1.1% in September, as Western Spruce-Pine-Fir 2×4 lumber prices rallied back (subsequently soaring to profitable levels in October with stepped-up sales to China).

    Lumber prices have recovered markedly in 2010, despite only a limited improvement in U.S. housing starts. B.C. lumber sales to China are on track to reach 2.5 billion board feet in 2010, accounting for 28% of B.C. production. China has surpassed Japan as Canada’s second-biggest lumber export destination.

    – John Powell

    • • •

    EDC: Economy at moment of truth

    The world economy is being truly tested. According to Export Development Canada’s Autumn 2010 Global Export Forecast, slower growth has taken the world by surprise and a true recovery is still a year away.

    EDC chief economist Peter Hall believes there are four key drivers to global demand that will challenge short-term growth strategies.

  • Big-market consumers are nervous. They are already busy paying down swollen debt loads and could weaken demand further by being frightened into more excessive thrift.
  • Stimulus exhausted most of the available policy ammunition. There are key doubts about both the affordability and the actual impact of augmented stimulus.
  • Financial institutions remain reticent about lending.
  • Slower growth is weighing down key emerging markets.

  • EDC forecasts the world economy will expand by 3.9% in 2011. They also predict Canadian export sales to remain at 11% with exporters buffeted by a stubbornly strong Canadian dollar, which they believe will average US 95 cents in 2011.

    “Managing through the upcoming slow months and a continued high dollar will require ingenuity and grit,” Hall said. “Slower growth promises even more intense competition, and the world’s largest economies, facing weak domestic conditions, are embarking on new export-led strategies aimed at more favorable demand elsewhere.”

    – John Powell

    • • •

    Swiss Bank research available

    A Zurich-based company has made it easier for advisors to help their clients pick a Swiss bank.

    Worldbox Business Intelligence has released a Swiss Banks CD-ROM which provides information on more than 300 of the institutions. On the CD are contact details and information on the owners, board of directors and managers. Standard financial records available on Worldbox’s database include: turnover, EBIT, results, capital, equity, balance sheets, employee costs, depreciation, cash-flow and investments.

    An extended version of the CD-ROM includes additional financial details on profit and loss, balance sheet as well as supplementary information in PDF format. To download a sample, click here. The full versions can be ordered here.

    Currently, the Canada Revenue Agency (CRA) is reviewing a list of 1,800 Swiss and auditing the largest accounts held by Canadians to make none of them are evading taxes.

    Last year, the CRA found over $1 billion in unpaid federal tax hidden offshore by Canadians. The government’s voluntary disclosure program uncovered an additional $138 million.

    The list came into the hands of Canadian authorities when an IT security specialist at HSBC Private Bank copied and saved the names and details of approximately 80,000 clients. He handed that list over to tax authorities in France and the list made its way to Canada.

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    – John Powell with files from Steven Lamb.

    • • •

    CSI mobile app a global hit

    CSI is celebrating over 15,000 downloads of its iPhone financial glossary application.

    Launched in May and available for iPhones, iPods and iPads, the free application is a reference tool for financial services professionals, investors and CSI students that explains more than 4,000 financial terms and definitions.

    Besides Canada, the highest number of downloads are from the U.S. (17.4%), Singapore (8.2%) and the U.K. (3.9%).

    “The impressive growth in downloads and interest in the CSI financial glossary app shows we’ve struck the right cord with the financial services community, marrying cutting-edge technology with best practices in education and knowledge management,” says Roberta Wilton, president and CEO, CSI Global Education Inc. “We are thrilled about the success of this program not only in Canada, but also internationally, with half of all downloads generated outside of Canada.”

    A demo of the application, can be downloaded here. The full version can be purchased from the iTunes app store at

    – John Powell

    (10/26/10) staff


    The staff of have been covering news for financial advisors since 1998.