Saturday, May 30, 2009

FKLI Commentary on 01/06/09


FKLI May futures contract rose 16 point higher to close at 1054.5 as compare to previous trading session with total 5,211 lots traded in the market. FKLI was traded higher in 2nd trading session as most of the regional indices were closed after trading session.

Technically, FKLI confirmed retrace 38.1% Fibonacci retrace levels at 1033 region after stopped around support trend line for the rising wedge in the hourly chart. Based on our technical analyst, we expect FKLI would have final blow upwards which resistance seen at 1063 and 1071 region. Traders were advice to taking profit for all long position in the coming trading session and be prepare to hold position provided resistance levels were not violated while critical support seen at 1033.5 and 1026 regions.

FCPO Commentary on 01/06/09


FCPO 3rd month August Futures contract surge RM47 to close at RM2552 levels as compare to previous trading session with 10,326 lots traded in the market. CPO price traded higher in the previous trading session but fall back before market about to close due to some holiday profit taking activities.

Technically, CPO price seems temporary topped around resistance area at RM2575 region; 50% Fibonacci retrace from low at RM2350 levels. Based on our technical studies, our opinion suggest that CPO price might encounter great selling pressure around resistance area at RM2575, RM2627 and RM2702 region. Traders were advice to hold short position on next rebound provided resistance levels were not violated while confirmation of selling pressure when support levels at RM2525 and RM2462 region. Short term support seen at RM2550 and RM2538.

Crude Oil Caps Biggest Monthly Gain Since 1999 on Dollar Drop

May 29 (Bloomberg) -- Crude oil rose, capping its biggest monthly gain in a decade, as the dollar weakened against the euro, bolstering the appeal of commodities.

Oil climbed above $66 a barrel to a six-month high as the dollar declined beyond $1.41 against the euro for the first time this year, making raw materials such as oil and gold an attractive alternative investment. Prices also gained as U.S., and Asian indicators pointed to a global economic recovery.

“The devaluation of the dollar is leading to the revaluation of energy and commodities in general,” said John Kilduff, senior vice president of energy at MF Global in New York. “This is a monetary-based rally. The market is focused on the future and ignoring the fundamentals of the present day crude-oil supply and demand picture.”

Crude oil for July delivery rose $1.23, or 1.9 percent, to $66.31 a barrel at 2:59 p.m. on the New York Mercantile Exchange, the highest settlement since Nov. 4. Oil advanced 30 percent in May, the biggest monthly increase since March 1999, when Asia was recovering from the 1997-1998 financial crisis. Prices climbed 7.5 percent this week and 49 percent this year.

The U.S. currency had its biggest monthly decline against the euro this year. The dollar dropped 1.4 percent to $1.4134 versus the single European currency.

Commodities are heading for the biggest monthly rally in 34 years, led by energy futures. In May, the Reuters/Jefferies CRB Index of 19 energy, metal and agricultural prices has gained 13 percent, the most since July 1974. The index is up 1.3 percent to 253.05 today, the highest since Nov. 10.

Consumer Confidence

Confidence among U.S. consumers rose this month to the highest level since September. The Reuters/University of Michigan final index of consumer sentiment increased to 68.7, more than forecast, from 65.1 in April.

“This rally is based more on hope than on fact,” said Adam Sieminski, the chief energy economist at Deutsche Bank AG in Washington. “The move has been more tied to rising consumer sentiment than market fundamentals.”

The U.S. Commerce Department reported that gross domestic product shrank at a 5.7 percent annual rate during the first quarter, compared with an initial 6.1 percent estimate, capping its worst six-month performance in five decades.

India, Asia’s third-largest economy, expanded 5.8 percent in the three months to March 31, led by government spending and construction, the statistics office in New Delhi said today. Economists were expecting a 5 percent increase.

Japan’s factory production last month climbed 5.2 percent from March, the Trade Ministry said today in Tokyo. Companies said they planned to increase output in May and June as well, the report showed. Japan is the world’s second-biggest economy and the third-biggest oil consumer.

Lower Supplies

Prices are also rising because of declining U.S. inventories. Crude-oil supplies fell 5.41 million barrels to 363.1 million last week, an Energy Department report showed yesterday. It was the biggest decrease since September. The drop left inventories 27 percent greater than the five-year average, up from a 23 percent surplus a week earlier.

U.S. gasoline stockpiles dropped 537,000 barrels to 203.4 million last week, the lowest since December, according to the report.

Gasoline for June delivery rose 2.05 cents, or 1.1 percent, to end the session at $1.931 a gallon in New York, the highest settlement since Oct. 9.

The Organization of Petroleum Exporting Countries predicted stronger demand as it decided yesterday to keep output quotas unchanged. OPEC agreed at three meetings last year that the 11 members with production quotas would reduce output by 4.2 million barrels a day.

‘Prices Are Good’

Saudi Arabian Oil Minister Ali al-Naimi said OPEC opted not to alter its output targets because “prices are good, the market is in good shape.”

Oil’s rally is driven by improving sentiment about the global economy and isn’t supported by demand, OPEC Secretary General Abdalla el-Badri said today. Global crude stockpiles remain very high, El-Badri told reporters at a briefing in Vienna. Still, prices may reach $70 to $75 a barrel by the end of the year, partly because speculators are returning to commodity markets, he said.

OPEC, the International Energy Agency and Energy Department cut their projections for global crude-oil demand this month.

“The drop in U.S. inventories is evidence that the OPEC production cuts are starting to bite,” said Michael Lynch, president of Strategic Energy & Economic Research, in Winchester, Massachusetts. “There’s some optimism about the economy, which is driving the oil market. It’s important to keep in mind that demand has shown absolutely no sign of recovery.”

Brent Oil

Brent crude for July settlement rose $1.13, or 1.8 percent, to end the session at $65.52 a barrel on London’s ICE Futures Europe exchange. It was the highest settlement since Nov. 4.

Crude oil volume in electronic trading on the Nymex was 359,775 contracts as of 3:11 p.m. in New York. Volume totaled 501,771 contracts yesterday, 0.6 percent higher than the average over the past three months. Open interest was 1.12 million contracts. The exchange has a one-business-day delay in reporting open interest and full volume data.

Soybeans Rise on Higher Export Demand for Shrinking U.S. Supply

May 29 (Bloomberg) -- Soybeans rose, capping the biggest monthly advance since June, on speculation that overseas demand will reduce supplies from the U.S, the world’s biggest grower.

Exporters sold 237,400 metric tons of U.S. soybeans in the week ended May 21, boosting commitments in the current marketing year by 14 percent from a year earlier, the U.S. Department of Agriculture reported today. About 227,000 tons were sold for the year that starts Sept. 1, boosting those sales to 3.77 million tons, up 62 percent from a year earlier, USDA data show.

“Export sales will keep the bullish enthusiasm running high,” Mark Schultz, a Northstar Commodity Investments vice president in Minneapolis, said by telephone. “Rising demand for new-crop soybeans underscores overseas concerns about reduced crops” in Brazil and Argentina, the two biggest exporters after the U.S., he said.

Soybean futures for July delivery rose 5 cents, or 0.4 percent, to $11.84 a bushel on the Chicago Board of Trade. The most-active contract rose 1.5 percent this week, climbing for a fifth straight week, and jumped 12 percent for the month. The price touched $12.0075 on May 27, the highest since Sept. 25.

U.S. inventories on Aug. 31, before the harvest, will drop to a five-year low of 130 million bushels from 205 million bushels a year earlier, the USDA said on May 12.

Dollar Tumbles

The dollar weakened to a five-month low, heading for its biggest monthly decline this year against the euro. The U.S. currency slumped as mounting evidence that the global recession is easing sent investors searching for higher-yielding assets, including commodities, said Victor Lespinasse, a market analyst for GrainanAlysts.com in Chicago.

The U.S. Dollar Index, a six-currency gauge that includes the euro and yen, fell as much as 1.6 percent to the lowest since Dec. 18. The slump helped the Reuters/Jefferies CRB Index of 19 raw materials surge 14 percent in May, the biggest monthly rise since July 1974.

“Traders are bulled up on the sharp sell-off in the dollar index today,” Lespinasse said. “A lower dollar makes U.S. grains more competitive in the world market, boosting export prospects.”

Soybeans are the second-biggest U.S. crop, valued in 2008 at a record $27.4 billion, behind corn at $47.4 billion, government figures show.

Friday, May 29, 2009

Oil Heads for Biggest Monthly Gain Since 1999 on OPEC Output

May 29 (Bloomberg) -- Crude oil headed for its biggest monthly gain in a decade after OPEC kept its output unchanged amid signs the global economy is recovering.

Oil has gained 28 percent in May as equities rose and the U.S. dollar weakened, spurring demand for commodities. Japan said today that its industrial output climbed the most in at least six years in April, improving the outlook for a rebound in fuel demand.

“Oil has followed equities primarily because investors have cash on hand on the sidelines,” Victor Shum, a senior principal at Purvin & Gertz Inc., said in Singapore. “They are counting on some of the positive economic indicators, and are placing bets.”

Crude oil for July delivery rose as much as 36 cents, or 0.6 percent, to $65.44 a barrel on the New York Mercantile Exchange. It was at $65.40 at 2:46 p.m. in Singapore. Yesterday, the contract gained $1.63, or 2.6 percent, to settle at $65.08 a barrel, the highest since Nov. 5.

Oil is poised for the largest increase since March 1999, when Asia was recovering from the 1997-1998 financial crisis and fuel demand started rising in China and India. Oil gained 37 percent, according to Bloomberg data.

Saudi Arabian Oil Minister Ali al-Naimi said that the Organization of Petroleum Exporting Countries opted not to alter its output targets because “prices are good, the market is in good shape.”

Dollar, Stocks

Crude should stay in a $60-to-$70 a barrel range for the rest of the year, OPEC Secretary General Abdalla el-Badri said. The Energy Department said yesterday that U.S. oil supplies fell the most since September.

“If we are able to keep this $60 to $70 price for the remainder of the year, it will be fine,” OPEC’s El-Badri said in a Bloomberg Television interview.

The dollar is set for the first decline in two months versus the euro, falling to $1.4005 per euro at 7:16 a.m. in London from $1.3941 in New York yesterday.

U.S. stocks rallied, led by banking and energy shares, as a rebound in 10-year Treasuries eased concern record government debt sales will trigger higher borrowing. The Standard & Poor’s 500 Index added 1.5 percent and the Dow Jones Industrial Average advanced 1.3 percent.

Japan’s factory production climbed 5.2 percent from March, when it gained 1.6 percent, the Trade Ministry said today in Tokyo. The increase was faster than the 3.3 percent expected by economists. Companies said they planned to increase output in May and June as well, the report showed.

U.S. Inventories

Oil jumped to a six-month high yesterday after the Energy Department weekly reported showed a drop in inventories.

U.S. crude inventories declined 5.41 million barrels to 363.1 million last week, according to the department. It was the biggest drop since September, when hurricanes hit the Gulf of Mexico coast. A 150,000-barrel reduction was forecast, according to the median of 12 analyst responses in a Bloomberg News survey.

The decline left inventories 27 percent higher than the five-year average, up from a 23 percent surplus a week earlier. Stockpiles were the highest since 1990 in the week ended May 1.

“The oil market fundamentals still remain relatively fragile, notwithstanding the gains in the oil price,” said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney.

Refineries operated at 85.1 percent of capacity, up 3.3 percentage points from the previous week, the biggest gain since October, the report showed.

Gasoline stockpiles dropped 537,000 barrels to 203.4 million, the lowest since the week ended Dec. 5, according to the report.

OPEC Limits

Gasoline for June delivery rose 0.2 cent, or 0.1 percent, to $1.9125 a gallon in New York at 2:21 p.m. in Singapore. It gained 1.88 cents, or 1 percent, to end yesterday’s session at $1.9105 in New York, the highest settlement since Oct. 13.

Saudi Arabia’s Al-Naimi forecast that oil may rise to $75 a barrel by this year’s third or fourth quarter. The group’s next meeting will be on Sept. 9, he said.

Other OPEC ministers said the group would work toward finishing previously announced reductions. OPEC has yet to complete output cuts totaling 4.2 million barrels a day agreed to last year.

“I don’t buy the story that we are going to go to $150 next week,” Jan Stuart, Macquarie Group Ltd.’s oil analyst in New York, said in an interview with Bloomberg Television. “What I do buy is that there is the beginning of a recovery.”

The production ceiling is 24.845 million barrels a day for 11 of its members. They pumped 25.812 million a day in April, a May 13 report from the group showed. Iraq has no quota.

Brent crude for July settlement was 26 cents higher at $64.65 a barrel on London’s ICE Futures Europe exchange at 2:48 p.m. Singapore time.

Palm Oil on Track for First Weekly Gain in Three on Supply Risk

May 29 (Bloomberg) -- Palm oil futures advanced, heading for the first weekly gain in three, on speculation vegetable oil supplies won’t keep pace with rising demand.

The oil used in cooking and biofuel has gained as soybean crops decline in Brazil and Argentina, the biggest producers after the U.S., and inventories in the U.S. are forecast to reach a five-year low. The price of palm oil, a substitute for soybean oil, tends to rise when there is a soybean shortage.

“The South American soybean harvest continues to disappoint, and we now expect Argentina production to decline 28 percent year-on-year in 2009 and Brazil to be down 4 percent,” Goldman Sachs (Singapore) Pte. analysts Patrick Tiah and Nikhil Bhandari said in a report today. “Meanwhile, India’s edible oil demand has been stronger than expected due to low prices.”

Palm oil for August delivery on the Malaysia Derivatives Exchange increased 0.7 percent to 2,523 ringgit ($721) a metric ton at the 12:30 p.m. local-time trading break, up from 2,521 ringgit at the end of last week. The oil is headed for the first monthly decline in seven, paring this year’s rally, amid concerns that prices may have run up too quickly.

Still, the outlook is “bullish” given the prospect of soybean shortages and dwindling inventory in Indonesia and Malaysia, Indonesian Palm Oil Board Deputy Chairman Derom Bangun said at a conference in Jakarta today.

“The price is bullish in the medium term,” he said, forecasting a gain to “around $800 per ton,” including costs and insurance, in Rotterdam. Palm oil in Rotterdam has gained 41 percent to $760 a ton this year.

Stockpile Concerns

Bangun raised concerns about palm oil stockpiles in Malaysia, the largest producer after Indonesia. The Malaysian Palm Oil Board said April stockpiles fell to 1,292,303 tons, down 5.4 percent from the previous month and the lowest level since June 2007.

Inventory in Indonesia is also shrinking, he said, without giving the volume. Indonesia does not release monthly data.

Soybeans traded in Chicago have gained 21 percent this year and may climb as high as $14 a bushel by October as Brazil raises the use of crops for energy, Dorab Mistry, director of Godrej International Ltd., said yesterday. That may spur palm oil to advance to 3,000 ringgit a ton within a month, he said.

India may import 8.5 million tons of edible oils in the year ending October, compared with 6.3 million tons in the previous 12 months, of which 5.3 million tons will be palm oil, Mistry said.

OPEC Holds Production Quotas Steady, Predicting Demand Recovery

May 28 (Bloomberg) -- OPEC decided to keep production quotas unchanged a meeting today in Vienna, banking on a recovery in oil demand toward the end of the year.

The Organization of Petroleum Exporting Countries, responsible for 40 percent of global crude supply, agreed to maintain production quotas at 24.845 million barrels a day, Saudi Oil Minister Ali al-Naimi said. It’s the second time this year the 12-member group has met without revising that total.

“The market is oversupplied, it’s true,” OPEC Secretary General Abdalla el-Badri told at a press conference afterwards, saying the group decided against cutting output to avoid sending the “wrong signal” and disrupting an economic recovery. “If we are able to keep this $60 to $70 price for the remainder of the year, it will be fine,” he said in a Bloomberg Television interview.

Oil futures in New York have gained 45 percent this year on speculation that demand will revive as the global economy starts to recover. Prices were little changed immediately after OPEC’s decision, which was correctly predicted by 25 out of 27 analysts surveyed by Bloomberg. Later in the day, an inventory decline boosted July crude to a six-month high of $64.99 a barrel.

“I don’t think there was any way they could justify cutting again at $60-plus crude,” said Mike Wittner, head of oil research at Societe Generale SA in London. “If they can maintain discipline and limit the production creep that comes with higher prices, stocks should start to come down.”

OPEC has yet to complete previous reductions that came into effect at the start of the year.

April Increase

The 11 nations bound by quotas, which exclude Iraq, pumped 25.81 million barrels a day in April, about 225,000 more than March and the first increase in nine months, according to OPEC’s latest monthly report. That means the group has completed 77 percent of its pledged 4.2 million barrel-a-day cut, down from a revised 82 percent for March.

Nigerian Petroleum Minister Rilwanu Lukman, 71, supported OPEC’s decision to keep production quotas unchanged, saying he’d like compliance with output targets to be 100 percent “if possible.” Algerian Energy Minister Chakib Khelil said the group’s overall compliance has “never been better.”

Still, Saudi Arabia is the only member so far to have curbed production to below its national quota, according to estimates compiled by OPEC and the International Energy Agency.

Oil Movements, a U.K.-based tanker tracking consultancy, expects OPEC to increase shipments by 1.4 percent in the four weeks to June 13.

Going Other Way

“They’re going the other way” instead of moving towards full compliance, Oil Movements founder Roy Mason said by telephone today from Halifax, England.

The Paris-based IEA cut its oil-demand forecast for a ninth consecutive month in May, predicting global consumption this year will fall the most since 1981. Saudi Arabia’s al-Naimi acknowledged yesterday that while he expects oil consumption to recover in Asia, he has yet to see signs that demand is increasing in Europe or the U.S., the world’s biggest consumer.

The U.S. recession will probably end in the third quarter, according to 74 percent of economists in a National Association for Business Economics survey.

“We are seeing light at the end of the tunnel,” el-Badri said at today’s press conference. While OPEC doesn’t have an official price target, oil is currently near a level that members can live with, he said.

‘Suitable’ Price

“$70 is suitable,” said OPEC’s el-Badri, who is a former Libyan oil minister. “We can invest and have a decent income” for our countries.

U.S. crude oil stockpiles earlier this month swelled to their highest in two decades. They fell a bigger-than-expected 5.4 million barrels last week to 364.7 million, the Energy Department reported more than four hours after OPEC’s meeting ended, helping push prices near to $65.

Saudi Arabia’s al-Naimi forecast that oil may rise to $75 a barrel by this year’s third or fourth quarter. “Prices are good, the market is in good shape,” al-Naimi, 74, said as he left OPEC headquarters today. The group’s next meeting will be on Sept. 9.

Oil Trades Near Six-Month High After OPEC Decision, Supply Drop

May 29 (Bloomberg) -- Crude oil was little changed near a six-month high after rising yesterday as OPEC decided to leave production quotas unchanged and a government report showed that U.S. inventories declined.

Saudi Arabian Oil Minister Ali al-Naimi said that the group opted not to alter its output targets because “prices are good, the market is in good shape.” Oil should stay in a $60 to $70 range for the rest of the year, OPEC Secretary General Abdalla el-Badri said. The Energy Department said yesterday that U.S. oil supplies fell the most since September.

“Oil was firmer reflecting probably more macro influences than oil specific fundamentals,” said David Moore, a commodity strategist with Commonwealth Bank of Australia in Sydney. “The EIA data was supportive for the oil price.”

Crude oil for July delivery dropped 30 cents to $64.78 a barrel on the New York Mercantile Exchange at 9:43 a.m. in Sydney. Yesterday, the contract rose $1.63, or 2.6 percent, to settle at $65.08 a barrel, the highest since Nov. 5.

Oil futures in New York have gained 45 percent this year on speculation that demand will revive as the global economy starts to recover. “If we are able to keep this $60 to $70 price for the remainder of the year, it will be fine,” OPEC’s El-Badri said in a Bloomberg Television interview.

U.S. stocks rallied, led by banking and energy shares, as a rebound in 10-year Treasuries eased concern record government debt sales will trigger higher borrowing and oil climbed. The Standard & Poor’s 500 Index added 1.5 percent and the Dow Jones Industrial Average advanced 1.3 percent.

U.S. Inventories

U.S. crude inventories declined 5.41 million barrels to 363.1 million last week, according to the Energy Department. It was the biggest drop since September, when hurricanes hit the Gulf of Mexico coast. A 150,000-barrel reduction was forecast, according to the median of 12 analyst responses in a Bloomberg News survey.

The decline left inventories 27 percent higher than the five-year average, up from a 23 percent surplus a week earlier. Stockpiles were the highest since 1990 in the week ended May 1.

“The oil market fundamentals still remain relatively fragile, notwithstanding the gains in the oil price,” Commonwealth’s Moore said.

Refineries operated at 85.1 percent of capacity, up 3.3 percentage points from the previous week, the biggest gain since October, the report showed.

Gasoline stockpiles dropped 537,000 barrels to 203.4 million, the lowest since the week ended Dec. 5, according to the report.

‘Energy Bull Alive’

Gasoline for June delivery fell half a cent, or 0.3 percent, to $1.9055 a gallon in New York at 9:33 a.m. in Sydney. It rose 1.88 cents, or 1 percent, to end yesterday’s session at $1.9105 a gallon in New York, the highest settlement since Oct. 13.

“It seemed like the oil market did not care what OPEC had to say, even if it was negative for oil, the energy market was going to go up no matter what,” said Mike Sander, an investment adviser at Sander Capital Advisors Inc. in Seattle. “The energy bull is very much alive in the market and I am not sure what will put him down.”

Saudi Arabia’s Al-Naimi forecast that oil may rise to $75 a barrel by this year’s third or fourth quarter. The group’s next meeting will be on Sept. 9, he said.

Other OPEC ministers said the group would work toward finishing previously announced reductions. The Organization of Petroleum Exporting Countries has yet to complete output cuts totaling 4.2 million barrels a day agreed to last year.

“I don’t buy the story that we are going to go to $150 next week,” Jan Stuart, Macquarie Group Ltd.’s oil analyst in New York, said in an interview with Bloomberg Television. “What I do buy is that there is the beginning of a recovery.”

The production ceiling is 24.845 million barrels a day for 11 of its members. They pumped 25.812 million a day in April, a May 13 report from the group showed. Iraq has no quota.

Brent crude for July settlement gained $1.89, or 3 percent, to end yesterday’s session at $64.39 a barrel on London’s ICE Futures Europe exchange, the highest since Nov. 4.

Yen Gains on View Improving Japan Economy to Fuel Fund Inflows

May 29 (Bloomberg) -- The yen rose from a two-week low against the dollar and the euro after a government report showed Japanese industrial output gained the most in at least six years, fueling speculation funds will flow into the nation’s assets.

Japan’s currency extended a second monthly gain versus the dollar after the Trade Ministry report also showed companies said they planned to increase output in May and June. Bank of Japan Governor Masaaki Shirakawa said this week the economy will resume growing this quarter after shrinking a record 15.2 percent in the three months ended March 31.

“The strong output data raised expectations for rises in capital inflow into Japanese assets,” said Masashi Hashimoto, Tokyo-based senior foreign-exchange analyst at Bank of Tokyo- Mitsubishi UFJ Ltd., a unit of Japan’s largest lender. “As worries about the global gloom ease, the correlation between the yen and economic data and stock prices may turn positive.”

The yen climbed to 96.49 per dollar as of 9:34 a.m. in Tokyo from 96.85 in New York yesterday, when it fell to 97.24, the weakest since May 12. The yen gained to 134.75 versus the euro from 135.04 yesterday, when it touched 135.29, the lowest since April 7. The dollar bought $1.3961 per euro from $1.3941.

Thursday, May 28, 2009

FKLI Commentary on 29/05/09


FKLI May futures contract plunge 11.5 point lower to close at 1038.5 as compare to previous trading session with total 5,055 lots traded in the market. FKLI was traded mainly towards lower during trading session as Dow Jones overnight trading and regional indices were traded lower on closing.

Technically, FKLI starts to plunge after manage to break down from the upper support trend line. However, FKLI seems manage to temporary supported above 138.1% Fibonacci projection figures at 1033 regions. Our technical view for FKLI trading is still suggest to hold short position in the coming trading session provided resistance levels at 1042 and 1053 must not be violated. Traders were advice to take profit once support levels at 1031 or 1017 were not able to penetrate by existing selling pressure.

FCPO Commentary on 29/05/09


FCPO 3rd month August Futures contract close unchanged at RM2505 levels as compare to previous trading session with 9,456 lots traded in the market. CPO price was traded wild as crude oil and soybean oil electronic trading was traded both directions during trading session.

Technically, CPO price seems traded sideways throughout entire trading session despite was traded within large range. Based upon our technical view, we suggest that CPO price might continue to rebound in the coming trading session with resistance levels seen at RM2577 and RM2627; both 50% and 61.8% Fibonacci retracement respectively. However, traders were advice to hold short position in the coming as medium term trend still riding on bear rally.

Malaysian palm futures may hit 3,000 rgt on crude -Fry

JAKARTA, May 28 (Reuters) - Malaysian crude palm oil futures may hit 3,000 ringgit if crude oil markets continue to rise, top industry analyst James Fry said on Thursday, although he declined to give a timeframe.

"I myself would say the price will be 3,000 ringgit but it depends on crude oil, not vegetable oil," Fry, chairman of London-based commodities consultancy LMC International, told reporters on the sidelines of a conference in the Indonesian capital.

Fry said Malaysian palm oil stocks may drop further in May, echoing the comments of many analysts and plantation owners. Palm oil inventories in April reached 22-month lows, at 1.29 million tonnes.

India was seen buying more palm oil on fears that the newly elected government would reimpose an import tax on the vegetable oil, Fry said, but did not give a figure for expected volumes. (Reporting by Aloysius Bhui; Writing by Niluksi Koswanage; Editing by Clarence Fernandez)

OPEC Set to Maintain Oil Quotas in Bet That Demand Will Recover

May 28 (Bloomberg) -- OPEC is likely to leave production quotas unchanged at today’s meeting in Vienna in a bet that demand will recover, pushing prices as high as $75 a barrel by year’s end, ministers said.

Officials from five of the 12 members of the Organization of Petroleum Exporting Countries said yesterday in Vienna they supported leaving targets unchanged, as the group did at its last meeting in March. They will push instead for better compliance with targets set late last year.

“There is no need to cut production,” Saudi Arabian Oil Minister Ali al-Naimi told reporters yesterday in Vienna. OPEC should “stay the course” because are there signs that fuel demand in rising in Asia, said al-Naimi, who represents OPEC’s biggest exporter and most influential member.

Crude oil for July delivery rose 1.6 percent to $63.43 a barrel at yesterday’s settlement on the New York Mercantile Exchange. Futures touched $63.82, the highest since Nov. 10, and prices are up 42 percent this year. Oil rose above its 200-day moving average for the first time since September, a signal that prices will rally further, according to technical traders.

Some members of OPEC, which produces about 40 percent of the world’s crude, are still wary of this year’s rebound in oil prices. Al-Naimi acknowledged that he has yet to see signs that demand for oil is increasing in Europe or the U.S., the world’s biggest oil consumer.

Oil prices are higher than fundamentals would indicate, Algerian Minister Chakib Khelil told reporters yesterday in Vienna. United Arab Emirates Oil Minister Mohamed al-Hamli, arriving for the OPEC meeting, said the market was “certainly” oversupplied.

Swollen Inventories

U.S. crude oil inventories rose to the highest level in two decades earlier this month, while the International Energy Agency says global demand is falling the most since 1981.

Even so, Iranian Oil Minister Gholamhossein Nozari, who represents the group’s second-biggest producer, said OPEC is unlikely to change its quota at today’s meeting.

OPEC members need to complete production cutbacks because oil prices haven’t yet reached the desired level of $70 to $75 a barrel, OPEC President Jose Maria Botelho de Vasconcelos said.

While price gains in recent days are “positive signs,” they don’t provide “absolute tranquility” for oil-producing nations, Botelho de Vasconcelos, who also is Angola’s oil minister, said from the airport yesterday.

Last Year’s Target

OPEC has yet to complete production cuts totaling 4.2 million barrels a day that the group agreed to late last year. The production ceiling is 24.845 million barrels a day for 11 of its members. Iraq has no quota.

Those 11 nations pumped 25.81 million barrels a day in April, an increase of about 225,000 from March and the first increase in nine months, according to OPEC’s latest monthly report. That means the group has completed 77 percent of its cuts, down from a revised 82 percent for March.

Venezuela is working to clarify its OPEC production quota after an audit of the country’s exports showed output is higher than the group estimated, Oil and Energy Minister Rafael Ramirez said yesterday in Vienna.

Saudi Arabia is the only member so far to have curbed production to below its national quota. Angola, Venezuela and some other OPEC members have complained that the group’s method of measuring cuts by using independent production estimates is inaccurate.

‘Stillborn’

“Lagging quota compliance by the non-Gulf Arab states -- hovering around 50 percent - has hamstrung any real discussion of a potential cut to accelerate the drawdown of the glut,” according to a PFC Energy report provided yesterday by analyst David Kirsch, who is in Vienna. “Purported requests by Angola to revise or suspend its quota, as well as moves by Venezuela to certify a higher production figure, leave any proposal for further output restraint effectively stillborn.”

Twenty five out of 27 analysts surveyed by Bloomberg last week said they expected OPEC to leave existing quotas unchanged at this week’s Vienna meeting. The Saudi minister said he doesn’t expect OPEC to hold another meeting before September.

Al-Naimi said he is “confident” oil prices will return to about $75 a barrel by this year’s third or fourth quarter. “If demand picks up, then why do anything?”

Oil is likely to rise to $80 as the growth trend in fuel demand outpaces supply, according to Paul Horsnell, head of Barclays Capital commodities research.

“It’s very tempting for it to be written that there was a commodities boom and now there’s a bust and now we’re back where we were,” he said yesterday in an interview. “We’re definitely not back to where we were.”

Crude Oil Declines on OPEC Production, Drop in U.S. Equities

May 28 (Bloomberg) -- Oil fell in New York, snapping two days of gains, after Saudi Arabia’s oil minister said OPEC doesn’t need to cut output and U.S. stocks slumped because of concern higher borrowing costs may hinder an economic recovery.

Oil demand is starting to recover, removing any need to reduce production, Ali al-Naimi said yesterday in Vienna. U.S. benchmark stock indexes dropped on a jump in long-term borrowing costs. The 10-year Treasury note declined for a fourth day, sending its yield to a record spread above two-year notes.

“There is a very high correlation with equities,” Mark Pervan, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne, said in an interview with Bloomberg Television. “Contrary to what OPEC is saying, demand remains very weak.”

Crude oil for July delivery dropped 58 cents, or 0.9 percent, to $62.87 on the New York Mercantile Exchange at 10:20 a.m. in Sydney. Yesterday, the contract rose $1, or 1.6 percent, to settle at $63.45 a barrel, the highest since Nov. 5.

The Organization of Petroleum Exporting Countries is likely to keep output quotas unchanged for a second time this year at its meeting that starts in the Austrian capital today, according to a Bloomberg survey published on May 22. Saudi Arabia is the biggest and most influential member of OPEC.

The S&P 500 dropped the most in two weeks, losing 1.9 percent, and the Dow Jones Industrial Average sank 2.1 percent. General Motors Corp. had the biggest drop in both gauges after failing to persuade enough bondholders to exchange debt for equity, pushing the company closer to bankruptcy.

Fresh Cuts

Venezuelan Oil Minister Rafael Ramirez said a fresh cut may be needed later this year because the market remains oversupplied by about 1 million barrels a day. Today’s meeting will focus on 100 percent compliance with existing production targets, he said.

OPEC, whose members supply 40 percent of the world’s oil, has yet to complete output cuts totaling 4.2 million barrels a day that the group agreed to late last year. The production ceiling is 24.845 million barrels a day for 11 of its members. They pumped 25.812 million barrels a day in April, a May 13 report from the group showed. Iraq has no quota.

The group’s members need to complete production reductions because oil prices haven’t yet reached the desired level of $70 to $75 a barrel, OPEC President Jose Maria Botelho de Vasconcelos said yesterday in Luanda, Angola.

Iranian Oil Minister Gholamhossein Nozari said the group is unlikely to alter output at the meeting. Iran is OPEC’s second- biggest oil producer.

$80 Oil

Oil is likely to rise to $80 as the growth trend in fuel demand outpaces supply, according to Paul Horsnell, head of commodities research at Barclays Capital.

“Higher oil prices are not going to be helpful to the economic situation,” Howard Gruenspecht, the acting head of the Energy Department’s Energy Information Administration, said in Washington yesterday.

The U.S. recession will probably end in the third quarter, a survey of business economists showed. The world’s largest economy and energy consumer will begin to expand next quarter, according to 74 percent of economists in a National Association for Business Economics survey.

Current prices are “reflecting some optimism from financial markets that we may have bottomed out in terms of the recession,” Didier Houssin, the International Energy Agency’s director of Energy Markets and Security, said at a conference in Paris. “The driving season is coming in the U.S. and some people think it may be more significant than last year because of lower prices at the pump” and inventory declines, he said.

Supplies Drop

Oil supplies fell 2.82 million barrels to 364.7 million in the week ended May 22, the industry-funded American Petroleum Institute said yesterday. U.S. gasoline supplies dropped 758,000 barrels last week to 205.4 million, the API said.

API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.

The Energy Department is scheduled to release its supply report today at 11 a.m. in Washington, a day late because of the Memorial Day holiday.

U.S. gasoline supplies dropped 1.3 million barrels last week, according to the median of 13 estimates by analysts before the Energy Department report. Inventories fell 6.1 percent in the previous four weeks. Analysts were split over whether crude supplies rose or fell in the week ended May 22.

Brent crude for July settlement rose $1.26, or 2.1 percent, to end yesterday’s session at $62.50 a barrel on London’s ICE Futures Europe exchange. It was the highest settlement since Nov. 4.

Soybeans Rise to Eight-Month High as China Demand Erodes Supply

May 27 (Bloomberg) -- Soybeans rose to an eight-month high as record imports by China, the world’s biggest consumer of the commodity, erodes inventories held in the U.S., the largest grower and exporter.

Imports may exceed 4.5 million metric tons this month, reach 4.2 million tons in June and exceed 3 million tons in July and August, the China National Grain and Oils Information Center said today in a statement. The country imported a record 13.9 million tons in the first four months of the year, according to the customs office. Soybean prices are up 21 percent this year.

“The Chinese are committed to increased imports to build reserve inventories,” said Tim Hannagan, a grain analyst for Alaron Trading Corp. in Chicago. “The function of the market is to ration remaining supplies, and that may require a much bigger rally” to slow demand, he said.

Soybean futures for July delivery rose 1.5 cents, or 0.1 percent, to $11.87 a bushel on the Chicago Board of Trade, after earlier touching $12.0075, the highest for a most-active contract since Sept. 25.

China is aiming to stockpile 7.25 million tons of soybeans by the end of June, an amount close to half of the country’s output. Corn, rapeseed and rice inventories also are being increased by the government to bolster domestic farm incomes, which have dropped as the global recession crimped demand.

U.S. inventories on Aug. 31, before this year’s harvest, will drop to a five-year low of 130 million bushels from 205 million bushels a year earlier, the USDA said May 12.

Soybeans are the second-biggest U.S. crop, valued in 2008 at a record $27.4 billion, government figures show. Corn was valued at $47.4 billion.

Gold Pares Gains in New York as Dollar Rises; Silver Advances

May 27 (Bloomberg) -- Gold prices were little changed in New York, paring an earlier gain, after demand for the metal as a store of value eased as the dollar rose. Silver advanced.

The U.S. Dollar Index, a six-currency gauge of the greenback’s value that includes the euro and yen, climbed after North Korea provoked international condemnation by exploding an atomic device on May 25 and test-firing missiles. The index fell 3.7 percent last week to a 2009 low, while gold increased 3 percent. The metal typically moves inversely to the dollar.

“The market is overbought,” Jon Nadler, a senior analyst at Kitco Metals Inc., said by e-mail. “Where are the jitters? North Korea did not do the trick,” he said. “Add it all up, and we see profit-taking as imminent.”

Gold futures for August delivery rose 10 cents to $955.20 on the New York Mercantile Exchange’s Comex division, after earlier climbing as much as 0.7 percent.

Bullion for immediate delivery in London was little changed, rising 55 cents to $952.55 an ounce. The metal rose to $951 an ounce in London’s afternoon “fixing,” used by some mining companies to sell their output, from $945 yesterday.

Silver futures for July delivery jumped 26.5 cents, or 1.8 percent to $14.865 an ounce in New York.

“I’m 100 percent sure that the U.S. will go into hyperinflation,” Marc Faber, publisher of the Gloom, Boom and Doom Report, said in a Bloomberg Television interview from Hong Kong. “I don’t think that gold will run up right away. I never sold gold and I’m still buying gold.”

‘Adequate Hedge’

Gold “has been an adequate hedge against inflation,” Faber said. “If you bought it in 1980 at the price of $850, then it hasn’t been a good hedge against inflation, but if you bought it in 1999 at $251, then it has done very well.”

Hedge funds and other large speculators increased their net-long position in New York gold futures last week, according to U.S. Commodity Futures Trading Commission data. The net-long position, or bets on higher prices, rose 7.7 percent from the previous week, the data show.

“The inverse correlation between gold prices and the U.S. currency will only strengthen once inflation concerns intensify,” said Andrey Kryuchenkov, an analyst at VTB Capital in London.

“Where is inflation? A speck on the horizon,” Kitco’s Nadler said.

Wednesday, May 27, 2009

FKLI Commentary on 28/05/09


FKLI May futures contract rose 8 point lower to close at 1050 as compare to previous trading session with total 9,517 lots traded in the market. FKLI was mainly traded sideways throughout entire trading session ranging from 1047 to 1053 regions despite regional equity indices and Dow Jones overnight strong closing.

Technically, FKLI seems encounter some great selling around previous high region at 1056.5 region and 78.6% Fibonacci retrace levels at 1053 regions. Our opinion suggest that FKLI would continue to trade lower in the coming trading session provided resistance levels at 1056.5 and 1063 were not violated. Traders were suggest to hold short position in the coming trading session while be alert around support levels at 1026 and 1017 regions.

FCPO Commentary on 28/05/09


FCPO 3rd month August Futures contract surge RM75 lower to close at RM2505 as compare to previous trading session with 13,218 lots traded in the market. CPO price was traded north throughout entire trading session as soybean oil and crude oil electronic trading was traded strong while stay firm during overnight trading despite CPO price plunge during previous trading session.

Technically, CPO price might seem temporary topped around RM2505 regions as its 38.1% Fibonacci projection level. Our technical analyst suggests us that CPO price might be temporary topped around resistance levels at RM2520 andRM2538 regions. Traders were advice to hold take profit in the coming trading provided resistance levels were not violated. Trader might consider to hold short position for short term trading as we think CPO price trading might have some small pull back in the coming trading session. As for overall trend, we still view CPO price was riding on a major correction wave before another bull rally comes into picture.

Soybeans Rise to Eight-Month High on Record China Shipments

May 27 (Bloomberg) -- Soybean futures rose to the highest in eight months in Chicago on concern record imports by China, the world’s biggest buyer of the oilseed, will erode global supplies as delays in U.S. plantings threaten to curb yields.

China’s soybean imports in May could exceed 4.5 million metric tons, the China National Grain and Oils Information Center said in a statement today. Inbound shipments may reach 4.2 million tons in June and exceed 3 million tons in July and August, it said. Imports were a record 13.9 million tons in the first four months of the year, according to the customs office.

“China came to the market with record imports” of commodities including soybeans and metals, Jonathan Barratt, managing director at Commodity Broking Services in Sydney said by phone today. That has helped lift global demand “at a time when you’d expect to see limited demand,” he said.

Soybeans for July delivery rose as much as 0.8 percent to $11.95 a bushel, the highest price for the most-active contract since Sept. 26. The contract traded at $11.925 a bushel at 3:20 p.m. Singapore time.

Plantings of soybeans, corn and wheat in the U.S. have been behind the average in the previous five years as wet weather made fields too muddy for heavy farm machinery.

Soybean planting in the U.S. as of May 24 was 48 percent finished, compared with 49 percent a year earlier, the Department of Agriculture said yesterday. The five-year average for the date was 65 percent.

‘Higher Prices’

“U.S. plantings are about 20 percent behind where they should be,” Barratt said. “This will translate into higher prices of grain,” he said.

Soybean imports by Japan, the world’s second-largest buyer, may drop 5.7 percent this year after futures in Chicago surged, an industry group said. Imports may decrease to 3.5 million tons from 3.71 million last year, Yoshikazu Sawanobori, executive director at the Japan Oil & Fat Importers & Exporters Association, said today in an interview.

Wheat for July delivery in Chicago rose 0.3 percent to $6.14 a bushel at 3:09 p.m. Singapore time after reaching $6.1725. Corn for July delivery advanced 0.2 percent to $4.2825 a bushel after trading as high as $4.315.

About 79 percent of the spring-wheat crop was seeded, versus 50 percent a week earlier and 97 percent a year earlier, the department said. The average for the date for the previous five years was 95 percent.

About 82 percent of the U.S. corn crop was planted as of May 24, the USDA said. That compares with 86 percent a year earlier and the previous five-year average of 93 percent. An estimated 52 percent of the crop had emerged from the ground, compared with the five-year average of 71 percent, according to the USDA.

Corn Planting

“When I look at the weather concerns in North America at the moment, I get a sense we’re going to see a bit more of a panic occurring,” Barratt said. Farmers may rush to plant the crops despite unfavorable weather conditions, resulting in lower yields, he said.

China’s Jilin province, the country’s top corn producer, may increase output of the grain from a year earlier after the planted area expanded, possibly boosting exports, a regional agriculture official said.

“We are striving to exceed last year’s output of 28.4 million tons,” Ren Kejun, director of Jilin’s agriculture committee, said in an interview in Changchun yesterday. The month-old seedlings are in the best condition in recent years, he said.

Oil Extends Gains After Rising on Consumer Confidence, Equities

May 27 (Bloomberg) -- Crude oil extended gains after rising yesterday as a report showing a jump in U.S. consumer confidence triggered an advance in equities.

Oil rose to its highest settlement in more than six months in New York yesterday as U.S. benchmark stock indexes climbed for the first time in five sessions. The biggest gain in consumer confidence since 2003 spurred optimism the worst of the recession is over in the world’s largest oil-consuming nation.

“It’s the latest in a string of data which has suggested that a recovery is imminent,” said Toby Hassall, research analyst with Commodity Warrants Australia Pty. in Sydney. “If equities can march higher and the dollar weakens then perhaps oil might be able to build a base around $60 a barrel.”

Crude oil for July delivery rose as much as 50 cents, or 0.8 percent, to $62.95 a barrel on the New York Mercantile Exchange and was trading at $62.67 at 8:15 a.m. in Singapore. Futures gained 1.3 percent yesterday to $62.45 a barrel, the highest close since Nov. 5.

The Conference Board’s sentiment index surged to 54.9, more than forecast and the biggest increase since 2003, the New York- based research group said yesterday.

The Standard & Poor’s 500 Index increased 2.6 percent to 910.33 and the Dow Jones Industrial Average climbed 2.4 percent to 8,473.49.

“It is getting to a level now where we are going to need to see demand start to pick up if we are going to see this rally continue up to the mid-$60s,” Hassall said.

OPEC Meeting

The Organization of Petroleum Exporting Countries should “stay the course” on output policy, Saudi Oil Minister Ali al- Naimi said yesterday in Vienna, where the group meets on May 28. A Persian Gulf oil official familiar with the matter said May 25 that OPEC won’t change its quotas.

Saudi Arabia is the biggest and most influential member of OPEC. The producer group is likely to keep daily output quotas unchanged at 24.845 million barrels when it meets tomorrow, according to a Bloomberg News survey of 27 analysts.

Comments from other OPEC members May 25 gave mixed indications about the group’s likely course of action. Algerian minister Chakib Khelil said the group will be careful about harming the global economic recovery, while Libyan official Shokri Ghanem said there’s a 50 percent chance of a supply cut.

“If they do keep production at current levels then it should push oil back down, at least below $60,” said Mike Sander, an investment adviser at Sander Capital Advisors Inc. in Seattle.

The 11 OPEC members with quotas, all except Iraq, pumped 25.812 million barrels a day last month, a report from the group on May 13 said, citing secondary sources, which include estimates from analysts and news organizations. That’s up 225,000 barrels a day from March.

Higher Inventories

U.S. crude oil supplies probably rose 50,000 barrels in the week ended May 22 from 368.5 million the previous week, according to the median of 10 estimates by analysts before an Energy Department report tomorrow.

Total U.S. daily fuel consumption averaged 18.3 million barrels in the four weeks ended May 15, down 7.6 percent from a year earlier, the department said last week.

Crude oil stockpiles held by the 28 nations advised by the International Energy Agency rose to 62 days of demand in the first quarter, according to the agency’s report earlier this month. That is up from 54 days in the year-earlier period and 58 days in the fourth quarter of 2008.

Brent crude for July settlement rose 24 cents, or 0.4 percent, to $61.48 a barrel at 8:18 a.m. in Singapore. Yesterday it gained $1.03, or 1.7 percent, to end at $61.24 a barrel on London’s ICE Futures Europe exchange. It was the highest settlement since Nov. 5.

Yen Declines as Signs of U.S. Recovery Boost Demand for Yield

May 27 (Bloomberg) -- The yen weakened as U.S. economic reports added to evidence the start of a recovery is near, reducing demand for safety.

The yen fell against 15 of the 16 most-active currencies after data showed U.S. consumer confidence climbed this month to the highest since September and manufacturing in the central Atlantic region unexpectedly rose. Australia’s dollar gained for a second day against the yen on speculation stocks will extend a global rally, boosting appetite for high-yielding assets.

“When there is a bit of optimism about the economy, demand for the safe-haven currencies weakens,” said Yousuke Hosokawa, a senior currency dealer in Tokyo at Chuo Mitsui Trust & Banking Co., a unit of Japan’s seventh-largest banking group. “The dollar, in particular, is hostage to a possible capital outflow from dollar-denominated assets to riskier assets.”

The yen declined to 133.34 per euro as of 8:51 a.m. in Tokyo from 132.90 in New York yesterday. The dollar traded at $1.3997 per euro from $1.3984. It touched $1.4051 on May 22, the weakest level since Jan. 2. The yen bought 95.26 versus the dollar from 95.03.

The Australian dollar rose to 75.03 yen from 74.71 yesterday. The Standard & Poor’s 500 Index added 2.6 percent yesterday and the MSCI World Index climbed 1.7 percent.

The dollar dropped to C$1.1152 from C$1.1164 yesterday, after reaching C$1.1151, the lowest level since Oct. 8. The greenback also fell to $1.5972 per British pound from $1.5926 after touching $1.5977, the weakest since Nov. 6.

‘Road to Recovery’

The Conference Board said its index of U.S. consumer sentiment surged in May to 54.9, higher than forecast and the biggest gain since April 2003. An index of manufacturing in the central Atlantic region climbed to 4 this month, the Richmond Federal Reserve Bank reported.

“Hopes the U.S. is on the road to recovery and strong global equities are reinvigorating risk appetite,” said Danica Hampton, a currency strategist at Bank of New Zealand Ltd. in Wellington. “This is reducing ‘safe-haven’ demand for the dollar and the yen.”

Combined sales of new and existing homes likely advanced to a 5.02 million annual rate from a 4.93 million pace in March, according to a Bloomberg News survey of economists before the release of data today and tomorrow.

Sales of existing houses, which account for more than 90 percent of the market, rose 2 percent in April to a 4.66 million annual rate from a 4.57 million pace the prior month, according to the survey median. The National Association of Realtors’ report is due today. Tomorrow, Commerce Department figures may show new-home sales increased 1.1 percent to a 360,000 annual rate, the most this year, the survey showed.

The yen held declines against the dollar after a government report showed the world’s second-largest economy unexpectedly posted a trade surplus in April.

Japan’s trade surplus totaled 68.9 billion yen ($724 million) for a third-straight month of surplus, compared with the median forecast for a 55.0 billion yen shortfall in a Bloomberg News survey of economists.

Tuesday, May 26, 2009

FKLI Commentary on 27/05/09


FKLI May futures contract fall 8.5 point lower to close at 1042 as compare to previous trading session with total 9,406 lots traded in the market. FKLI was traded lower during trading session as regional indices and Dow Jones electronic trading were traded lower during trading sessions.

Technically, FKLI seems fail to penetrate previous high at 1056.5 regions hence plunge after support levels t 1048 regions fails to hold against the selling pressure. Our opinion tell us that FKLI would temporary topped at 1056 region; complete 61.8% and 78.6% Fibonacci projection levels. FKLI would expect to trade lower in the coming trading session with support seen at 1026 and 1015 regions. Traders were advice to hold short position in the coming trading session while be cautious around resistance levels at 1050 and 1056 regions.

FCPO Commentary on 27/05/09


FCPO 3rd month August Futures contract plunge RM15 lower to close at RM2430 as compare to previous trading session with 13,971 lots traded in the market. CPO price plunge during trading session as soybean oil and crude oil electronic trading were traded lower during intraday trading session.

Technically, CPO price seems to temporary holding above support levels at RM2340 and RM2380 regions. Our opinion suggests that CPO price might be rebound in the coming trading session with potential resistance seen at RM2520 and RM2573 regions. Traders were advice to hold long position in the coming trading session for short term trading while be aware of support levels at RM2380 and RM2330 regions. Overall, CPO price was seen still riding on a bear trend for medium term trading.

Oil Falls on Concern OPEC May Maintain Output as Demand Slows

May 26 (Bloomberg) -- Crude oil fell on concern that OPEC will maintain production targets at current levels this week even as the global recession curbs fuel demand.

OPEC is unlikely to change output quotas at its May 28 meeting, and talk of overly high inventories is exaggerated, said a Persian Gulf oil official with knowledge of the matter. The International Energy Agency forecast this month that world oil consumption this year will drop by the most since 1981.

“The expectation that OPEC won’t change its output quotas can be viewed as bearish because inventories are indeed high,” said Victor Shum, a senior principal at oil industry consultants Purvin & Gertz Inc. in Singapore. “Most traders do feel that the fundamentals aren’t supportive of the current level of pricing. That’s adding to the downward pressure.”

Crude oil for July delivery fell as much as 84 cents, or 1.4 percent, to $60.83 a barrel on the New York Mercantile Exchange, and was at $60.85 at 1:35 p.m. in Singapore. The exchange will combine yesterday and today’s trading for settlement purposes as floor trading was shut yesterday in the U.S. for Memorial Day.

Crude oil inventories held by the 28 members of the International Energy Agency rose to 62 days of demand in the first quarter, according to the adviser’s report on May 13. That is up from 54 days in the year ago period and from 58 days in the fourth quarter of 2008.

“We could start to see the market moving from non- fundamental to fundamental factors,” said Mark Pervan, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. “A move away from the influence of equity markets toward more seasonal demand impacts.”

Driving Season

Refinery operations typically climb for the peak gasoline- consumption period, which lasts from the Memorial Day weekend, the traditional start of the U.S. summer travel season, to Labor Day in September.

Crude oil in New York may rise to $77 a barrel over the next several months as futures contracts “correct” the decline from a record $147.27 in July, according to technical analysis from MF Global.

Oil may first climb to $71.75 a barrel, the level reached on Nov. 4, P.A. Rajan, a Singapore-based technical analyst at MF Global, said in a telephone interview yesterday. Crude could reach $77, near the level equal to the so-called Fibonacci retracement of 38.2 percent of oil’s decline from the July record, or $76.28 a barrel.

“An overhang of inventories built up at sea and continuously poor economic data encourages selling because the rally looks unsustainable,” said Harry Tchilinguirian, BNP Paribas’s senior oil-market analyst in London.

Saudi Arabia

Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, is “absolutely fine” with adherence to the group’s 4.2 million barrel-a-day production cut, Oil Minister Ali al-Naimi said May 24.

Saudi Arabia is producing more crude oil than its OPEC quota, according to data from the Joint Oil Data Initiative, citing figures submitted by the country.

OPEC, responsible for 40 percent of global crude supply, is likely to keep output quotas unchanged for a second time this year as recovering oil prices forestall the need for new cuts, according to a Bloomberg survey published on May 22.

At the last summit on March 15, the group decided to leave quotas unchanged and adhere to its commitment to restrict supply.

Natural gas, heating oil and gasoline also fell in New York trading. Natural gas for June delivery fell 5 cents, or 1.4 percent, to $3.465 per million British thermal units.

The U.S. currency earlier rose against the euro after North Korea said it conducted a “successful” nuclear weapons test, spurring demand for the relative safety of the dollar and reducing the attractiveness of commodities as an inflation hedge.

The dollar had gained after North Korea announced the test, the second time Kim Jong Il’s regime detonated a nuclear device. The yen fell from near its highest level in more than two months, weakening to 94.87 per dollar by 4:50 p.m. in New York.

Brent crude for July settlement fell as much as 41 cents, or 0.7 percent, to $59.80 a barrel on London’s ICE Futures Europe exchange.

Gold Trades Near Two-Month High in Asia on Weak Dollar Outlook

May 25 (Bloomberg) -- Gold traded little changed near the highest in more than two months as a weakening dollar spurred interest in the precious metal as a haven investment.

Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, rose for the first time since May 13. Assets stood at 1,118.76 metric tons on May 22, according to figures on the company’s Web site. The Dollar Index, which measures the greenback against six major trading partners, was little changed after falling to the lowest this year on May 22.

“With a global recovery unlikely to be smooth, the two main risks to most asset values are inflation and the U.S. dollar -- both of which are decisively gold-positive,” Morgan Stanley analysts led by Hussein Allidina said in a report.

Gold for immediate delivery was at $955.70 at 2:23 p.m. in Singapore. The metal advanced to $961.33 May 22, the highest since March 20. Gold for June delivery in New York was down 0.3 percent at $956.10. The U.S. is closed for a holiday today.

The dollar approached its weakest level this year against the euro before the release of an Ifo Institute for Economic Research report today that economists say will show German business confidence rose in May, extending April’s rebound from a 26-year low. The dollar was at $1.4017 per euro from $1.3998 in New York on May 22, when it tumbled to $1.4051, the lowest level since Jan. 2.

Twenty-three of 30 traders, investors and analysts surveyed by Bloomberg News, or 77 percent, said gold would climb this week. Five forecast lower prices and two were neutral.

Among other precious metals for immediate delivery, silver was little changed at $14.66 an ounce, platinum lost 0.2 percent to $1,154.25 an ounce and palladium dropped 0.3 percent to $233 an ounce as of 2:27 p.m. Singapore time.

〔东京汇市〕美元/日圆盘初下跌,市场关注美国公债标售

0701GMT---东京美元兑日圆周二盘初报94.77,低于周一亚洲尾盘的95.10,投资人观望周二的美国两年期公债标售.此为美国本周总值1,010亿美元标债计画的先锋,也是投资人对美元和美元计价资产胃纳的重要测试.


欧元兑美元报1.4007,低于亚洲尾盘的1.4023,因德国Ifo企业景气指数逊于预期,暗示德国经济需要更多时间才能复苏.


尽管如此,欧元/美元仍接近上周触及的五个月高点1.4051.


今日交投料增温,因英国和美国在三日假期後,周二将恢复交易.(完)

OPEC to Keep Oil-Output Quotas Unchanged, Gulf Official Says

May 25 (Bloomberg) -- OPEC will keep oil-output targets unchanged when it meets later this week, a Persian Gulf oil official with knowledge of the matter said.

The Organization of Petroleum Exporting Countries is unlikely to change anything at its May 28 meeting, and talk of overly high inventories is exaggerated, said the official, who requested anonymity because the decision is not final.

Ali al-Naimi, oil minister for Saudi Arabia, the world’s biggest exporter, said May 23 that OPEC members will probably “stay the course” when they meet. At the last summit on March 15, the group decided to leave quotas unchanged and adhere to its earlier commitment to restrict supply.

Oil Falls on Concern Recession Will Curb Demand, OPEC Output

May 26 (Bloomberg) -- Crude oil fell on concerns that the global recession will prolong sluggish energy demand and after an OPEC official said the group may not alter production targets at its meeting this week.

A German survey of business confidence advanced less than economists expected as the worst business slowdown in a half century lingers in Europe, the U.S. and Asia. OPEC is unlikely to change anything after its May 28 discussions, and talk of overly high inventories is exaggerated, the official said yesterday, requesting anonymity as the decision isn’t final.

“We’ve got plenty of supplies and there’s nothing to suggest the economy is improving,” said Peter Beutel, president of Cameron Hanover Inc., an energy consulting company in New Canaan, Connecticut. “OPEC doesn’t look like it will lend much support. The market is trying to figure out where it’s going next.”

Crude oil for July delivery fell 46 cents, or 0.8 percent, to $61.21 a barrel on the New York Mercantile Exchange at 9:18 a.m. Sydney time. The exchange will combine yesterday and today’s trading for settlement purposes because floor trading was shut yesterday in the U.S. for Memorial Day. Markets in London were closed for a bank holiday.

Germany’s Ifo institute in Munich said yesterday its business climate index, based on a survey of 7,000 executives, increased to 84.2 in May from 83.7 in April. Economists expected a gain to 85, the median of 39 forecasts in a Bloomberg News survey. The index reached a 26-year low of 82.2 in March.

‘Continuously’ Poor Data

“An overhang of inventories built up at sea and continuously poor economic data encourages selling because the rally looks unsustainable,” said Harry Tchilinguirian, BNP Paribas’s senior oil-market analyst in London.

Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, is “absolutely fine” with adherence to the group’s 4.2 million barrel-a-day production cut, Oil Minister Ali al-Naimi said May 24.

Saudi Arabia is producing more crude oil than its OPEC quota, according to data from the Joint Oil Data Initiative, citing figures submitted by the country.

OPEC, responsible for 40 percent of global crude supply, is likely to keep output quotas unchanged for a second time this year as recovering oil prices forestall the need for new cuts, according to a Bloomberg survey published on May 22.

At the last summit on March 15, the group decided to leave quotas unchanged and adhere to its earlier commitment to restrict supply.

Natural Gas Falls

Natural gas, heating oil and gasoline also fell in New York trading. Natural gas for June delivery fell 5 cents, or 1.4 percent, to $3.465 per million British thermal units.

The U.S. currency earlier rose against the euro after North Korea said it conducted a “successful” nuclear weapons test yesterday, spurring demand for the relative safety of the dollar and reducing the attractiveness of commodities as an inflation hedge.

The dollar had gained after North Korea announced the test, the second time Kim Jong Il’s regime detonated a nuclear device. The yen fell from near its highest level in more than two months, weakening to 94.87 per dollar by 4:50 p.m. in New York.

Brent crude for July settlement fell 57 cents, or 0.9 percent, to settle at $60.21 a barrel on London’s ICE Futures Europe exchange yesterday.

Monday, May 25, 2009

FCPO Commentary on 26/05/09


FCPO 3rd month August Futures contract plunge RM76 lower to close at RM2445 as compare to previous trading session with 8,977 lots traded in the market. CPO price plunge soon before trading session was closed after long consolidation around RM2500 and RM2520 region as crude oil electronic trading plunge during the trading session.

Technically, CPO price seems to break down from previous low at RM2480 region to close at RM2445 levels; reach 78.6% Fibonacci projection levels. We suggest CPO might rebound soon in the coming trading session as MACD show mild bull divergence was seen in the hourly chart. However, traders were still suggests to hold short position around the resistance level at RM2530 and RM2660 in the coming trading session as medium term still favors to downtrend while be be extra cautious around support levels at RM2440 and RM2378 regions.

FKLI Commentary on 26/05/09


FKLI May futures contract rose 2.5 point higher to close at 1050.5 as compare to previous trading session with total 8,395 lots traded in the market. FKLI seems trading sideways after manage to breach new high at 1056.5 regions as regional indices and Dow Jones electronic trading were also awaiting fresh news to lead the market for direction.

Technically, FKLI yesterday reach 61.8% and 78.6% Fibonacci projection level at 1056 regions. Again, our opinion still suggests FKLI is trading on the top side with resistance seen at 1056 and 1063 regions. However, traders can try to hold long position for intraday trading but be cautious that support levels at 1045 and 1025 region must not be violated.

Oil Above $50 Saves Gulf States From Crisis, Lure KKR (Update1)

May 25 (Bloomberg) -- While their biggest customers may continue to wallow in recession into 2010, the oil-producing nations of the Persian Gulf are again luring foreign investment and looking for places to park their own wealth.

Crude prices that have stabilized above $50 a barrel mean the Middle East’s oil-rich economies are likely to pull out of the global financial crisis sooner than the rest of the world. Saudi Arabia, the largest Arab economy and the world’s biggest oil exporter, is attracting renewed interest from investors including leveraged-buyout firm KKR & Co. Qatar and Abu Dhabi have returned to international capital markets.

Stock markets are rallying across the region, led by Saudi Arabia, whose Tadawul All Share Index ended last week up 26 percent for the year to date, after tumbling 56.5 percent in 2008.

“The expected resilience of oil prices puts the Gulf countries in a relatively privileged position compared to Europe and the U.S.,” says Eckart Woertz, an economist at the Gulf Research Center in Dubai. “In 2010, that is likely to lead to some resumption of growth, unlike in developed-market economies.”

Crude oil traded at $61.61 a barrel on the New York Mercantile Exchange at 10:33 a.m. in Singapore -- up 81 percent from around $34 on Feb. 12. Prices will remain above $50 for the rest of this year and top $60 next year, according to the median forecast of analysts surveyed by Bloomberg.

Providing a Cushion

While that’s still less than half the record $147.27 a barrel reached last July, savings built up during the boom from 2003 to 2008 are providing a cushion for most of the Gulf’s petroleum producers to get them through the worst recession since World War II.

Saudi Arabia’s economy will shrink 0.9 percent this year, according to the International Monetary Fund’s April forecast, while the United Arab Emirates is projected to decline 0.6 percent and Kuwait 1.1 percent. By comparison, the U.S. may contract 2.8 percent, the European Union 4 percent and Japan 6.2 percent, the IMF says.

By next year, the IMF expects the Gulf oil states to resume expanding, with Saudi Arabia growing 2.9 percent and Kuwait 2.4 percent, while advanced economies as a whole have no growth.

As a result, the six states in the Gulf Cooperation Council, which hold 40 percent of global oil reserves, are already luring fresh capital from abroad. The Qatari joint venture of Newbury, England-based Vodafone Group Plc, the world’s largest mobile- phone company, raised about $1 billion last month in the country’s first initial public offering in nearly a year.

Accumulated Surpluses

Gulf oil exporters “have accumulated such big financial surpluses, and with ambitious expansionary fiscal budgets, things will be OK,” National Bank of Kuwait SAK Chief Executive Officer Ibrahim Dabdoub said in a May 14 interview at the World Economic Forum in Jordan. “We have started to see some green shoots here and there.”

International investors have taken notice. A Euromoney investment conference last week in the Saudi capital of Riyadh drew 1,600 participants, including representatives of Bank of New York Mellon, HSBC and Barclays Capital. Saudis in traditional white robes and red-and-white headdresses crowded a five-star hotel along with businessmen in suits from the U.S. and Europe.

Best Prospects

Abu Dhabi, with more than 90 percent of the emirates’ oil, has the best prospects in the region, along with Saudi Arabia and Qatar, the world’s largest exporter of liquid natural gas, says Simon Williams, chief regional economist at HSBC Holdings Plc in Dubai.

By contrast, the picture is a good deal grimmer in Dubai, which lacks the oil reserves of its U.A.E. partner Abu Dhabi and other neighbors. Dubai’s real-estate boom crashed last year, and it will continue to flounder, says Timothy Ash, head of emerging-market economics in London at Royal Bank of Scotland Group Plc.

The second-biggest of seven states making up the U.A.E., Dubai ran up debts of $80 billion and had to cancel projects including a waterfront development twice the size of Hong Kong Island. The traffic jams that clogged roads last year are gone; once-scarce taxis now sit outside residential buildings waiting for fares. Dubai property prices may fall as much as 70 percent from their peak, UBS AG predicts.

Hiring in Dubai

Even in Dubai, though, Emaar Properties PJSC, the U.A.E.’s biggest real-estate developer, says it is hiring 1,600 people for its retail, hospitality and leisure businesses, including three new attractions at Emaar’s Dubai Mall and three new hotels. And in the other Gulf economies, the presence of oil translates into a quickening of prospects.

“There is inherent stability in these markets,” says Emad Mostaque, a London-based Middle East equity-fund manager for Pictet Asset Management Ltd.,which oversees about $100 billion globally. “Next year you will see this region outperform other emerging and global markets.”

Mostaque says he is particularly interested these days in shares of Saudi consumer companies such as Riyadh-based food producer Almarai Co.

KKR is studying Saudi investments as it aims to take advantage of the region’s “most attractive markets,” says Makram Azar, head of Middle Eastern operations. This month, KKR named Ford M. Fraker, former U.S. ambassador to Saudi Arabia, as a senior adviser.

Diminishing Risk

Investors perceive diminishing risk on Gulf-region bonds, according to trading in credit default swaps. The cost of protecting against default by the Dubai government fell to 488 basis points on May 8 from a record high of 977 in February, CMA Datavision prices show. Saudi Arabia’s bond-default risk declined to about 162 basis points last week, from 335 basis points in February.

The apparent end of plans for a Gulf monetary union -- the U.A.E. pulled out of the project on May 20 -- won’t alter the region’s growth outlook because all the countries in the proposed union except for Kuwait already peg their currencies to the dollar, Woertz says.

In another sign that markets are opening up for Gulf borrowers, Qatar and Abu Dhabi raised $6 billion by selling bonds to international investors last month. Aldar Properties PJSC, Abu Dhabi’s biggest real-estate developer, sold $1.25 billion of 5-year notes May 21, becoming the first such firm in the U.A.E. to issue debt since August.

Sovereign Wealth

Meanwhile, Gulf sovereign-wealth funds, which turned their attention inward to shoring up domestic banks and domestic stock markets, now have an “appetite and cash available for selected strategic acquisitions” abroad, Woertz says.

Saudi Arabia has sovereign assets of around $438 billion, up from $335 billion at the start of 2008, according to estimates by RGE Monitor in New York. Abu Dhabi holds a fund of about $300 billion, and Kuwait has about $210 billion.

In March, Abu Dhabi agreed to buy 9.1 percent of German carmaker Daimler AG for 1.95 billion euros ($2.6 billion). Earlier this month it won approval to buy Nova Chemicals Corp., Canada’s largest chemical maker, for $499 million.

The region’s continued dependence on oil and gas is a “strength, not a weakness” that generates long-term surpluses, says HSBC’S Williams.

“I expect all of the region’s economies to fare well, including Dubai, which has a compelling economic case as the service hub for a rapidly growing and prosperous part of the world,” he says.

OPEC to Keep Supply Quotas Unchanged, Survey Shows (Update1)

May 22 (Bloomberg) -- The Organization of Petroleum Exporting Countries is likely to keep output quotas unchanged for a second time this year as recovering oil prices forestall the need for new supply cuts, according to a Bloomberg survey.

Oil has climbed 86 percent from a four-year low at the end of last year, reaching a six-month high of $62.26 on May 20 as OPEC implements record supply reductions to adjust to lower demand and rising stockpiles. The group will maintain a production target of 24.845 million barrels a day when it meets May 28, according to 25 of 27 analysts surveyed.

“Despite sky-high stocks, we expect another OPEC rollover,” said Mike Wittner, head of oil market research at Societe Generale SA in London. “Crude prices that have touched $60 and remain in the mid-to-upper $50s make it hard for OPEC to justify another cut.”

Kuwait’s oil minister and OPEC’s former secretary general said this week that further output curbs are unlikely. Last month the oil minister for Saudi Arabia, the organization’s largest producer and de facto leader, said arranging prices at $50 a barrel was the country’s “contribution” to the world economy. Of the other members, only Iran has publicly advised new cuts at the coming meeting in Vienna.

“I don’t see any indications that OPEC is seriously considering cuts,” former Secretary-General Adnan Shihab-Eldin said in Dubai yesterday. “OPEC does not want prices to be at such a point that it jeopardizes the recovery.”

‘Too Early’

Libya’s representative at OPEC meetings, National Oil Corp. Chairman Shokri Ghanem, said “it’s too early to say” what OPEC will decide.

“We’re still worried about the level of stocks,” Ghanem said today in a telephone interview from Tripoli. “Prices are improving, they are better, but they’re due in part to the speculators who are returning to the market and not only to the economic improvement.”

Venezuela, a member that often joins Iran in recommending lower output, said on May 15 the group should enforce quotas agreed on in December, without calling for new measures.

OPEC will opt for “steady as she goes, with a call for stricter compliance, and a communique acknowledging the economic recession and the possible need to cut output in the future,” said Peter Beutel, president of Cameron Hanover Inc., an energy consulting company in Connecticut.

OPEC’s ability to alter quotas may be limited by its failure to fully implement the series of cutbacks announced since last September. At its last gathering on March 15 the organization resolved to comply with agreed targets before considering fresh restrictions.

No Success

It has not been successful in doing this. The organization said on May 13 that last month it raised production for the first time since July, exceeding the collective quota by 967,000 barrels a day, or 3.9 percent.

The 11 OPEC members bound by targets implemented 77 percent of planned output cuts of 4.2 million barrels a day, down from a revised 82 percent for March, the Vienna-based organization said.

Still, OPEC may yet pay more attention to brimming stockpiles and concerns that demand is unstable rather than current prices, and choose to deepen output cuts, according to two of the survey respondents.

Crude inventories in the industrial economies of the Organization for Economic Cooperation and Development are at their highest since 1993, at 62 days of consumption, according to the International Energy Agency. Before OPEC’s meeting in December, members expressed concern that a level around 57 days was too high.

“OPEC will do the needful and cut by 1 million barrels a day for six months,” said Johannes Benigni, chief executive officer of JBC Energy GmbH in Vienna. “OPEC will be concerned about fundamentals, the build in inventories, rather than prices, as this is what their strategy has been.”

Sunday, May 24, 2009

FKLI Commentary on 25/05/09


FKLI May futures contract surge 19 point higher to close at 1048 as compare to previous trading session with total 10,692 lots traded in the market. FKLI traded against most of the regional equity indices as it search for new high during the trading session despite others were traded lower.

Technically, FKLI seems stopped around 38.1% Fibonacci support region at 1025 regions and traded upward throughout the entire trading session. We expect FKLI would try to test new high in the coming trading session which resistance levels seen at 1050 and 1063 regions. However, we suggest trader to hold long position for intraday purpose as we still think FKLI might be around the top regions. Support levels were seen at 1038 and 1025 regions.

FCPO Commentary on 25/05/09


FCPO 3rd month August Futures contract rebound RM23 higher to close at RM2522 as compare to previous trading session with 11,942 lots traded in the market. CPO price were traded sideways throughout entire trading session after plunge more than RM100 during previous trading session.

Technically, CPO price seems temporary bottomed around 61.8% Fibonacci projection at RM2488 regions and begin to consolidate within RM2500 and RM2520 range. We expect CPO price might rebound slightly higher in the coming trading session with resistance seen at RM2640 and RM2676 regions. Traders were advice to hold short position around the resistance levels while be alert that support levels were seen at RM2476 and RM2440 regions.