Oil Is Steady as Demand Concerns Outweigh Signs of Economy Gain

June 19 (Bloomberg) -- Crude oil traded above $71 a barrel in New York as short-term demand concerns outweighed signs of an economic rebound later this year in the U.S., the world’s biggest energy consumer.

The index of leading economic indicators rose in May and the number of Americans receiving jobless benefits fell for the first time since January, separate reports showed. U.S. demand for petroleum products averaged 18.5 million barrels a day over the past four weeks to June 12, down 6 percent from a year ago, the Energy Department said on June 17.

“The reaction to the U.S. data overnight was relatively muted despite it being on the good side of expectations,” said David Moore, a commodity strategist with Commonwealth Bank of Australia Ltd. in Sydney. “The fact that we’ve moved quite high at a time the international economy is in a recession means oil prices at $70 are at a solid level.”

Crude oil for July delivery was at $71.53 a barrel, up 16 cents, in electronic trading on the New York Mercantile Exchange at 7:53 a.m. Singapore time. Prices are up 60 percent this year and reached a seven-month high of $73.23 on June 11.

Oil prices are poised to fall 0.7 percent through this week, for the first time in five weeks.

Brent crude for August settlement increased 21 cents, or 0.3 percent, to end the session at $71.06 a barrel on London’s ICE Futures Europe exchange.

Gold, Silver Fall on Signs Recession May Be Nearing Bottom

June 18 (Bloomberg) -- Gold fell on speculation that a stronger dollar and an improving U.S. economy will reduce the metal’s investment appeal. Silver also declined.

The U.S. Dollar Index, a six-currency gauge of the greenback’s value, gained as much as 0.8 percent. Gold typically moves inversely to the currency. The index of U.S. leading economic indicators rose 1.2 percent in the six months through May, adding to signs that the worst recession in five decades may end this year.

“We have hit bottom for now, so we should see a strengthening dollar and weaker gold,” said Miguel Perez- Santalla, a Heraeus Precious Metals Management sales vice president in New York.

Gold futures for August delivery slipped $1.40, or 0.1 percent, to $934.60 an ounce on the New York Mercantile Exchange’s Comex division. Bullion for immediate delivery slipped $5.02, or 0.5 percent, to $933.85 at 8:23 p.m. in London.

“Tactical investors have rapidly increased their exposure to gold over the past two months, and in turn this has supported the strengthening of the correlation between the dollar and gold,” Yingxi Yu, an analyst at Barclays Capital Plc, said in a note. “Our expectations for the dollar to strengthen over the forthcoming weeks are likely to weigh upon prices.”

Before today, the dollar index was up 2.3 percent from this year’s low of 78.334 on June 2, while it was still down 11 percent from a high of 89.624 on March 4.

Silver Declines

Silver for July delivery fell 4 cents, or 0.3 percent, to $14.24 an ounce in New York. Silver for immediate delivery slipped 11 cents, or 0.9 percent, to $14.225 an ounce in London.

“Silver prices are likely to fare worse as gold prices ease, given the hefty build in speculative interest and its weak fundamentals,” London-based analysts at Barclays Capital Plc, including Gayle Berry and Suki Cooper, said today in a report. “Beyond near-term weakness, firm jewelry demand emerging upon dips in the gold price should limit the downside below $900.”

Platinum futures for July delivery gained $2.40, or 0.2 percent, to $1,207.60 an ounce on the Nymex. Palladium futures for September delivery fell $3.35, or 1.4 percent, to $239.70 an ounce. Platinum has rallied 28 percent this year and palladium is up 27 percent.

“If the metals begin to tank, it will be platinum that will eventually hold best,” Perez-Santalla said in a note.

Some investors buy precious metals, including platinum, as a store of value at times of political instability, or as a hedge against inflation when the dollar falls and oil gains.

Iran Propels Oil

In Iran, the second-largest oil producer in the Organization of Petroleum Exporting Countries, former Prime Minister Mir Hossein Mousavi joined a rally in Tehran today to protest his defeat in a disputed presidential election on June 12, state-run Press TV said.

Oil prices “will hold up heading into the weekend in light of the very unsettled Iranian situation,” Edward Meir, an MF Global Ltd. analyst in Darien, Connecticut, said in a report. “The next shoe to drop would be for the opposition to call for national strikes. In such a case, oil prices would be much more responsive to the upside, and we could see spillover strength in metals as well, so certainly we would not want to get too short commodities over the short term.”

“At the moment, we don’t see an argument for increased investment flows,” Manqoba Madinane, an analyst at Standard Bank Group Ltd. in Johannesburg, said by telephone today.

Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, has remained unchanged at 1,132.15 metric tons since June 5, the company’s Web site showed.

“Dip-buying from both investors and physical players looks set to absorb further dollar-related profit taking,” James Moore, an analyst at TheBullionDesk.com in London, said today in a note. “We expect the metal to spend further time consolidating in the $920-$950 area.”

Yen Falls as Signs Global Slump Easing Spurs Demand for Yield

June 19 (Bloomberg) -- The yen fell versus the Australian and New Zealand dollars for a second day as signs the global recession is easing spurred demand for higher-yielding assets.

Japan’s currency fell against all 16 major currencies after the Federal Reserve Bank of Philadelphia’s general economic index climbed yesterday to minus 2.2 from minus 22.6 in May, signaling the U.S. recession is bottoming out. The Conference Board’s index of U.S. leading economic indicators also rose more than forecast in May for the second straight month.

“We have seen some encouraging news about the global economy in the last 24 hours,” said Danica Hampton, a currency strategist in Wellington at Bank of New Zealand Ltd., the nation’s third-largest bank. “There’s been some relatively promising data out of the U.S. This is helping underpin growth to currencies like Japanese crosses.”

The yen fell to 61.69 against the New Zealand dollar as of 8:36 a.m. in Tokyo, from 61.56 yen yesterday in New York. The Australian dollar climbed to 77.22 yen from 77.02 yen. Japan’s currency traded at 96.58 per U.S. dollar from 96.47. It fell to 134.30 per euro from 134.17, declining for a third day.

The U.S. dollar rose versus the euro yesterday for the first time in three days after the British Bankers’ Association said it may allow more institutions to take part in the daily survey that sets the London interbank offered rate, the benchmark for more than $360 trillion of financial products around the world. Investors also abandoned bets that the euro would appreciate further after the common European currency failed to strengthen beyond $1.40.

Higher Libor?

“It would be a wider group of banks, so some ‘weaker’ ones who would submit higher rates, thus Libor would aggregate higher,” said Scott Ainsbury, a portfolio manager at New York- based FX Concepts Inc., the world’s largest currency hedge fund with about $12 billion in assets. “The market really has no conviction either way. So people are easy to get squeezed out.”

The dollar traded at $1.3906 per euro from $1.3900. It touched $1.4001 yesterday.

The Swiss franc weakened versus the euro yesterday on speculation the country’s central bank may sell the currency as it approaches the strongest level since March.

The franc slid 0.3 percent to 1.5103 per euro yesterday after rising as much as 0.3 percent to 1.5008. The currency hasn’t reached 1.50 since March 12, when the Swiss National Bank intervened. The SNB and the Basel-based Bank for International Settlements declined to comment on the currency’s turnaround.

Yield Differentials

Banks without a physical presence in London may apply to join the panel of members that contribute to the Libor-setting process, the BBA said yesterday. The BBA threatened in April 16 to ban members that deliberately understated rates before beginning a consultation process to discuss improvements.

“We think it’s the knock-on from the BBA report that’s boosting the dollar,” wrote Benedikt Germanier, a currency strategist in Stamford, Connecticut, at UBS AG, in a research note to clients yesterday. “The simple way to look at it is from a perspective of interest rate differentials moving in favor of the dollar.”

The yield advantage of two-year German bunds over the same- maturity U.S. note narrowed to 0.27 percentage point yesterday, the least since March.

“There is some focus on rising U.S. rates across the curve, and that is lifting the dollar,” aid Shaun Osborne, chief currency strategist in Toronto at TD Securities Inc., a unit of Canada’s second-biggest bank.

Treasuries fell yesterday, pushing yields higher, as reports showed the deepest recession in 50 years may be ending and the U.S. said note sales will increase to a record $104 billion next week. Yields on two-year notes increased 0.09 percentage point to 1.25 percent yesterday.

A “very large” euro sell-order hit the market immediately following the BBA news, said Greg Salvaggio, vice president of capital markets at currency-trading firm Tempus Consulting Inc. in Washington.

FKLI Commentary on 19/06/09

FKLI futures June contract fall 16.5 points lower to close at 1054.5 as compare to previous trading session with total 6,631 lots traded in the market. FKLI plunge during trading session despite Dow Jones electronic and regional indices only traded weak on the closing.

Technically, FKLI seems stopped at 138.2% Fibonacci projection levels at 1052 regions. based on our technical observation, we suggestion FKLI would trade lower in the coming trading session after a mild rebound towards resistance levels 1058 and 1069 regions. Traders were advice to hold short position around the resistance levels while be alert around support levels at 1049 and 1030 regions.

FCPO Commentary on 19/06/09

FCPO 3rd month Sept Futures contract plunge RM76 lower to close at RM2299 levels as compare to previous trading session with 12,584 lots traded in the market. CPO price was traded lower despite soybean oil and crude oil overnight trading was traded firm.

Technically, CPO price plunge after manage to penetrate previous low support levels at RM2350 regions. Based on our technical analyst wave count, we expect CPO price would continue to trade lower after possible mild rebound in the coming trading session where resistance levels seen at RM2350 and RM2425 regions. traders were advice to hold short position around the resistance levels while be cautious around support levels at RM2276 and RM2242 regions.

Soybeans Rebound as Midwest Rain Threatens to Curb U.S. Output

June 17 (Bloomberg) -- Soybeans rose the most in almost two weeks on speculation that rainfall will lead to a smaller increase in the number of acres farmers plant this year in the U.S., the world’s largest grower and exporter.

Planting was 87 percent finished as of June 14, compared with a five-year average of 92 percent, the U.S. Department of Agriculture said. About 72 percent of plants had emerged from the ground, compared with a five-year average of 83 percent. U.S. farmers had intended in March to boost planting by 0.4 percent to a record 76.024 million acres.

“There is an increased risk for lower soybean yields from all the rain,” said Bill Nelson, a senior economist for Doane Advisory Service Co. in St. Louis. “Fields have been absolutely drenched this week, and presumably that will mean fewer acres will be planted in Missouri, Illinois, Arkansas, Indiana.”

Soybean futures for November delivery, after the harvest, rose 21.5 cents, or 2.1 percent, to $10.50 a bushel on the Chicago Board of Trade, the biggest gain since June 4. Yesterday, the price touched $10.205, the lowest for the contract since May 26. Soybeans for July delivery, before the harvest, rose 5 cents, or 0.4 percent, to $12.0625.

As much as 3 inches (7.6 centimeters) of rain fell from northwest Arkansas to central Ohio in the past 24 hours, data from the National Weather Service show. The area has received as much as four times the normal rainfall during the past two weeks. Wet weather last month delayed corn planting and led to speculation that farmers would sow as much as 3 million more acres of soybeans, which grow more quickly.

Below Average

Soybean planting in Illinois, the biggest-producing state after Iowa, was 73 percent completed this week, less than the average of 92 percent in the previous five years, government data show.

The yield potential for fields planted after June 20 in Illinois will drop as much as 22 percent, and 30 percent for those sown after this month, according to Mike Toohill, an agronomist for Midwest Seed Genetics in Bloomington, Illinois.

“Lots of beans” have “yet to be planted around the state,” Toohill said in a report yesterday. “And with wet soils in many areas right now, it looks like the soybean- planting season will drag into late June and maybe even July in some areas of the state.”

The average U.S. yield this season has been forecast by the USDA at 42.6 bushels an acre, up 7.6 percent from 39.6 bushels last year.

Reduced Yield Potential

“U.S. yield potential is closer to 41 to 41.5 bushels,” Nelson said. “The inventory of soybeans is tight and will remain a positive fundamental factor.”

Domestic stockpiles on Aug. 31 will drop to 110 million bushels, down from 130 million projected in May and 46 percent less than a year earlier, the USDA said June 10. Inventories will reach 210 million bushels before the 2010 harvest, down from 230 million estimated in May, the department said.

Soybeans were the second-most valuable U.S. crop last year at a record $27.4 billion, behind corn at $47.4 billion, government figures show.

Oil Rises on Nigerian Militant Pipeline Attack, U.S. Stockpiles

June 18 (Bloomberg) -- Crude oil rose for a second day in New York after Nigerian militants claimed to destroy a supply pipeline and as U.S. stockpiles declined.

Crude oil for July delivery rose as much as 45 cents, or 0.6 percent, to $71.48 a barrel on the New York Mercantile Exchange. It was at $71.45 a barrel at 7:58 a.m. Singapore time. Prices are up 60 percent this year.

Gold Gains in N.Y. as Dollar Falls Against Euro; Silver Climbs

June 17 (Bloomberg) -- Gold prices advanced in New York as the dollar fell against the euro, boosting demand for the metal as a store of value. Silver also rose.

The U.S. currency weakened after a Labor Department report showed that in May, consumer prices fell the most in 12 months since 1950. The greenback slipped as much as 0.7 percent to trade at $1.3924 per euro from $1.3837 yesterday. Gold prices typically move in the opposite direction of the dollar.

“The U.S. dollar continues to be the story for gold,” Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said in a note.

Gold futures for August delivery rose $3.80, or 0.4 percent, to $936 an ounce on the New York Mercantile Exchange’s Comex division. Bullion for immediate delivery in London gained $2.53, or 0.3 percent, to $937.33 at 7:11 p.m. local time.

“The dollar eased against the euro after traders dialed back on expectations of a Fed rate hike -- before year’s end, anyway,” Jon Nadler, a Kitco Inc. senior analyst in Montreal, said in a note.

“The market still holds the potential to test $900,” said Ralph Preston, a Heritage West Futures Inc. commodity analyst in San Diego. “With this morning’s core consumer price index in line with expectations, $928.40 support is currently holding.”

“Inflation hawks hardly have a reason to soar,” Preston said. “With gold up a tad in today’s trade, gold bulls are hardly out of the corral yet.”

U.S. Inflation

Consumers’ cost of living rose 0.1 percent in May, less than the median estimate of analysts surveyed by Bloomberg News. The Labor Department said the consumer price index dropped 1.3 percent in the year ended May 31.

Investors “appear to be looking through the short-term period of deflation risk and are worrying about the prospects for longer-term inflation,” John Reade, UBS AG’s head metals strategist in London, said today in a report. “Should inflation concerns become more consensual, then gold could move a lot higher.”

Gold slipped to $930.50 in the afternoon “fixing” in London, a value used by some mining companies to sell their output, from $933.75 in the morning fixing.

Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, has remained unchanged at 1,132.15 metric tons, where it stood as of June 5, the company’s Web site shows. Gold held in ETF Securities Ltd.’s exchange- traded commodities fell 0.3 percent to 7.644 million ounces yesterday, its Web site shows.

Silver for July delivery gained 15 cents, or 1.1 percent, to $14.28 an ounce in New York. Silver for immediate delivery rose 10.5 cents, or 0.7 percent, to $14.31 an ounce at 7:10 p.m. in London.

FKLI Commentary on 18/06/09

FKLI futures June contract fall 9 points lower to close at 1071 as compare to previous trading session with total 6,267 lots traded in the market. FKLI was traded sideways in the early session but plunge during 2nd trading session despite most of the regional indices were holding firm on closing.

Technically, FKLI seems only rebound 38.1% Fibonacci level at 1078.5 regions after manage to break down from rising wedge in the hourly chart. Based on our technical knowledge, our opinion suggest FKLI would continue to trade lower in the coming trading provided FKLI continue traded below 80 – day and 100 – day exponential moving averaging while resistance levels seen at 1076 and 1087 regions. Traders were advice to hold short position in the coming trading session while be cautious around support levels at 1066 and 1057 regions.

FCPO Commentary on 18/06/09

FCPO 3rd month Sept Futures contract fall RM25 lower to close at RM2375 levels as compare to previous trading session with 7,789 lots traded in the market. CPO price plunge tracking behind soybean oil and crude oil electronic trading during the 2nd trading session.

Technically, CPO price seems only manage to rebound 38.1% Fibonacci levels at RM2420 regions. Based on our technical opinion, we suggest CPO price would trade lower in the coming trading session while further confirmation once support levels at RM2370 and RM2280 regions. Traders were advice to hold short position in the coming trading session while resistance levels seen at RM2420 and RM2475 regions.

Soybeans Rise on Weaker Dollar, Delayed Planting of U.S. Crop

June 16 (Bloomberg) -- Soybean prices rose for the first time in three sessions as the dollar’s decline boosts investor demand for commodities and farmers lag behind their normal pace for planting this year’s U.S. crop.

The U.S. Dollar Index fell as much as 1 percent, the first drop in three sessions. Yesterday, soybeans fell the most since Jan. 13 as the dollar index climbed. Farmers planted 87 percent of the U.S. crop as of June 14, down from the five-year average of 92 percent, the government said.

“Prices are up because of a weaker dollar,” said Charlie Sernatinger, a market analyst at Fortis Clearing Americas LLC in Chicago. “We still have almost 10 million acres of beans to put in the ground,” signaling yields may drop or farmers will abandon fields, he said.

Soybean futures for November delivery rose 3.75 cents, or 0.4 percent, to $10.285 a bushel on the Chicago Board of Trade. Yesterday, the contract plunged 4.8 percent. Futures for July delivery, before the harvest, rose 4.25 cents to $12.0125.

The U.S. Department of Agriculture, after surveying growers, said on March 31 that planting would increase 0.4 percent to a record 76.024 million acres this year.

About 72 percent of the crop has emerged from the ground, compared with 83 percent on average in the past five years. An estimated 66 percent was in good or excellent condition as of June 14, the USDA said in its first rating of this year’s crop. A year earlier, 56 percent got the top rankings after flooding damaged plants in parts of the western Midwest.

Forgo Seeding

Farmers may forgo seeding because of planting delays in Illinois, Indiana, Missouri, Kentucky and Arkansas, said Nate Smith, a market analyst and broker for the Linn Group in Chicago.

“There are serious discussions among farmers that they might take crop insurance instead of planting a crop this year,” Smith said. “They fought so hard to get the corn crop planted that they may just idle some ground,” rather than risk planting in wet soils and losing yield potential, Smith said.

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.

Crude Oil Falls on Dollar Rebound, U.S. Gasoline Supply Build

June 17 (Bloomberg) -- Crude oil fell for a third day as the dollar gained, reducing the appeal of commodities as an alternative investment, and an industry report showed U.S. gasoline supplies rose.

Motor fuel supplies last week climbed 2.1 million barrels even as the U.S. has entered the peak summer driving demand season, the industry-funded American Petroleum Institute said late yesterday. Industrial production dropped 1.1 percent in May signaling that the manufacturing slump remains broad-based, with capacity utilization falling to a record low of 68.3 percent.

“Oil as a commodity is particularly dependent on the U.S. economy so it will always have a sensitivity to the industrial data,” said Mark Pervan, a senior commodity strategist with Australia and New Zealand Banking Group Ltd. in Melbourne. “You would think at this time of the year we’d see lower U.S. gasoline stocks. That may be flagging that oil isn’t so strong in the gasoline market.”

Crude oil for July delivery fell as much as 56 cents, or 0.8 percent, to $69.91 a barrel in electronic trading on the New York Mercantile Exchange. It was at $70.03 a barrel at 8:22 a.m. Singapore time. Last week, oil touched a seven-month high of $73.23 a barrel. It has risen 57 percent this year. Yesterday, oil fell 15 cents to $70.47 a barrel.

Oil yesterday retreated from a 3 percent advance as the dollar strengthened from its weakest level against the euro since May 21.

The U.S. currency strengthened to $1.3837 against the euro yesterday after touching $1.3933, the weakest level since May 21. It was trading at $1.3833 at 8:14 a.m. Singapore time.

Equities Decline

U.S. stocks extended declines, undermining the optimism that the economy has past the worst of the global recession. The Standard & Poor’s 500 Index fell 1.3 percent to 911.97 in New York. The Dow Jones Industrial Average dropped 107.46, or 1.3 percent, to 8,504.67.

“Pressure was put on the oil market from the major equities indexes trading lower for much of the day,” said Mike Sander, an investment adviser at Sander Capital in Seattle. “The past two days we have seen oil trade below $70 and not hold. We will need oil to close below that barrier if we want it to trade lower.”

Brent crude for August settlement was at $70 a barrel, down 24 cents, on London’s ICE Futures Europe exchange at 8:17 a.m. Singapore time. The contract ended yesterday unchanged from June 15 at $70.24 a barrel.

Gold Rises Most in a Week as Declining Dollar Increases Demand

June 16 (Bloomberg) -- Gold rose the most in more than a week as oil rallied and the dollar weakened, increasing demand for the metal as an alternative investment. Silver and platinum also gained.

The U.S. Dollar Index, a gauge of the greenback’s value, dropped as much as 1 percent on concern that leaders of Brazil, Russia, India and China will act to lessen their dependence on the dollar as a reserve currency at a meeting today in Russia. Gold slid 3.6 percent in the previous two sessions to the lowest in more than three weeks as the dollar index gained 2.2 percent.

“Gold took its cues from the dollar sell-off (as well as from a spike in crude oil) and vaulted higher,” Jon Nadler, a senior analyst at Kitco Inc., said today in a note. Oil fell 0.2 percent to $70.47 a barrel in New York after earlier jumping as much as 3 percent.

Gold futures for August delivery rose $4.70, or 0.5 percent, to $932.20 an ounce on the New York Mercantile Exchange’s Comex division. Bullion for immediate delivery climbed $6.32, or 0.7 percent, to $934.61 an ounce at 8:24 p.m. in London, halting a four-day decline, the longest since March.

“The U.S. currency continues to dictate direction,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said today in a note. “We expect gold to start consolidating” this week “as the dollar retreats.”

Gold slipped to $934 an ounce in the afternoon “fixing” in London, used by some mining companies to sell their output, from $936.75 in the morning fixing.

Finance ministers from Group of Eight industrialized nations agreed that it is prudent to consider steps to scale back economic stimulus measures once global growth resumes. The leaders asked the International Monetary Fund to examine how that can be done without causing a financial crisis.

Inflation Concern

“Provided this talk from policy makers intensifies towards the end of the year, we might see another strong rally in gold,” Kryuchenkov said. “Your average investor knows that G-8 finance ministers are already pondering rising inflation.”

Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, has remained at 1,132.15 metric tons, which it reached as of June 5, the company’s Web site shows. Gold held in ETF Securities Ltd.’s exchange-traded commodities fell 0.2 percent to 7.669 million ounces yesterday, from 7.681 million ounces on June 12, its Web site showed.

Silver futures for July delivery rose 10 cents, or 0.7 percent to $14.13 an ounce in New York. Silver for immediate delivery advanced 12.5 cents, or 0.9 percent, to $14.20 an ounce at 8:26 p.m. in London.

Platinum Advances

Platinum futures for July delivery gained $7.20, or 0.6 percent, to $1,220.90 an ounce in New York, the first increase in four sessions. Palladium futures for September delivery slid $3.20, or 1.3 percent, to $242.80 an ounce, the fourth-straight decline.

Platinum gained only because gold and silver rose and the dollar slumped, Kitco’s Nadler said by e-mail. “Based on fundamentals, and based on the auto sector’s lack of vital signs, there is little to compel people to run out and buy the noble metals.”

Platinum and palladium are used mostly in emission-control parts in cars and trucks. Some investors buy both metals as a store of value when the dollar falls or oil gains, boosting inflation concerns.

Platinum held in ETF Securities’ exchange-traded commodities gained 0.9 percent to 342,921 ounces yesterday, the company’s Web site showed. Silver holdings were little changed and palladium assets were unchanged.

FKLI Commentary on 17/06/09

FKLI futures June contract retrace 5.5 point lower to close at 1080 as compare to previous trading session with total 7,423 lots traded in the market. FKLI seems traded sideways despite most of the regional indices and Dow Jones overnight trading plunge during trading session.

Technically, FKLI manage to plunge below the support trend line of the rising wedge but traded sideways as 80 – day and 100 – day exponential moving average seems support FKLI against the selling pressure. Based our technical knowledge, we expect FKLI wound rebound in the coming trading session to test resistance levels at 1088 and 1094. Traders were advice to hold short position provided resistance levels were not violated while support levels were seen at 1073 and 1066.

FCPO Commentary on 17/06/09

FCPO 3rd month Sept Futures contract rebound RM11 higher to close at RM2400 levels as compare to previous trading session with 10,034 lots traded in the market. CPO price was traded in large range during trading session due to some profit taking activities after fall for 3 – consecutive trading sessions.

Technically, CPO price seems bottomed around 200% projection at RMRM2360 levels. Based on our technical analyst, we suggest CPO price would rebound in the coming trading session where resistance levels seen at RM2460 and RM2510 region. Traders were advice to hold short position in the coming trading session while be extra alert around support level RM2350, RM2300 and RM2280 regions.

Soybean Futures Rebound on Slow U.S. Planting; Wheat Advances

June 16 (Bloomberg) -- Soybean futures rallied and wheat futures rose for the first time in five sessions as investors judged yesterday’s plunge as excessive and the U.S. said planting of the oilseed remained behind the five-year average.

Soybeans yesterday posted the biggest closing-price drop since Feb. 17 and wheat fell to the lowest in almost a month as the dollar gained. Some 87 percent of soybean crops were sown, down from the five-year average of 92 percent, the U.S. Department of Agriculture said yesterday in a report released after the close of trading in Chicago.

“There continue to be problems as far as planting” in the U.S. is concerned, Peter McGuire, managing director at Commodity Warrants Australia Pty in Sydney, said by phone today.

July-delivery soybeans gained as much as 1.5 percent to $12.145 a bushel, after closing down 3.9 percent yesterday. The futures traded at $12.14 a bushel at 2:42 p.m. in Singapore. The November-delivery contract gained 1.4 percent to $10.39 a bushel. The U.S. begins harvesting the next soybean crop in September.

Wheat for July delivery rose as much as 1 percent to $5.8125 a bushel in Chicago, after dropping to $5.68 yesterday, the lowest since May 18. The most-active contract traded at $5.7975 a bushel, up 0.8 percent, at 2:44 p.m. Singapore time.

About 9 percent of U.S. winter-wheat was harvested as of June 14, compared with 5 percent a week earlier, 16 percent a year earlier and the previous five-year average of 19 percent, the USDA said.

Export Inspections

The U.S. inspected 12.5 million bushels of soybeans for export in the week ended June 11, 36 percent higher than the 9.2 million bushels inspected a week earlier, the USDA said yesterday in separate report. Corn export inspections totaled 31 million bushels, 17 percent higher than 26.5 million bushels a week earlier, the report said. The U.S. is the world’s biggest grower and exporter of soybeans and corn, according to USDA data.

“There could be a shortfall, which in turn will probably force prices up,” McGuire said. “We might be seeing a continuous strengthening of the corn, soy and wheat prices over the coming months.”

South Korea has bought up to 825,000 metric tons of corn, 220,000 tons of soybean meal and 110,000 tons of feed wheat from overseas since June 11, said two industry executives who are familiar with the purchases. The executives asked not to be identified as the trades were confidential.

Corn for July delivery gained as much 1.1 percent to $4.105 a bushel in Chicago before trading at $4.0925 a bushel, up 0.8 percent. The most-active contract yesterday lost as much as 4.7 percent to $4.055 a bushel, the biggest drop since Jan. 13.

Palm Oil Extends Losses on Production Increase, Export Decline

June 16 (Bloomberg) -- Palm oil futures fell for a fourth day on concern that exports are slowing at a time of seasonally higher production.

The tropical oil extended declines after data yesterday showed that exports from Malaysia, the second-largest producer, dropped in the first half of this month. Shipments fell 10 percent to 560,416 metric tons in the first 15 days of June, compared with May, independent cargo surveyor Intertek said. Societe Generale de Surveillance, another surveyor, said exports fell 9.4 percent in the period to 570,187 tons.

Last week, Malaysia’s Palm Oil Board said production of the commodity had surged 8.5 percent in May to 1.4 million metric tons compared with April. Stockpiles grew 5.7 percent to 1.37 million tons, the first increase in six months, the board said.

“Fundamentally, if exports are too slow and production continues to be good,” prices will come under pressure, Ong Chee Ting, an analyst at Maybank Investment Bank Bhd., said from Kuala Lumpur.

“The weather this month so far is good, so potentially we could see production rising again” for June, which “means inventory should be higher by the end of this month, again bearish news for crude palm oil,” he said.

August-delivery palm oil reversed early gains to drop as much as 1.3 percent to 2,369 ringgit ($670) a metric ton on the Malaysia Derivatives Exchange. The contract traded at 2,380 ringgit a ton at 11:54 a.m. local time.

Dalian palm oil for September delivery dropped 0.4 percent to 6,420 yuan ($939) a ton at the 11:30 a.m. trading pause. China is the largest user of palm oil.

Indonesia and Malaysia are the largest palm oil producers, accounting for about 90 percent of world output. Malaysian data are closely followed for industry trends. Indonesia doesn’t release monthly figures.

Crude Oil Is Little Changed on Dollar Gain, Equity Markets Drop

June 16 (Bloomberg) -- Crude oil was little changed near $70 a barrel in New York after falling as the dollar rose, limiting investors’ need to buy commodities to hedge against inflation.

The U.S. currency yesterday rose to its strongest against the euro since May 21 after Russian Finance Minister Alexei Kudrin said the nation has full confidence in the dollar. Stock markets retreated around the world, undermining optimism that fuel demand may increase as economies move past the worst of the global recession.

“Oil fell under pressure today from a weakening equities market and a pop in the dollar,” said Mike Sander, an investment adviser at Sander Capital in Seattle. “If the stock market pulls back further and the dollar rallies back to $1.35 a euro, oil will fall back to the mid-$60 range.”

Crude oil for July delivery was at $70.34 a barrel, down 28 cents, in electronic trading on the New York Mercantile Exchange at 7:27 a.m. Singapore time. Yesterday, it dropped $1.42, or 2 percent, to settle at $70.62 a barrel. Oil reached $73.23 on June 11, the highest in seven months.

U.S. stocks extended a global slide yesterday, dragging the Standard & Poor’s 500 Index down from a seven-month high. The S&P 500, which had climbed 40 percent from a 12-year low March 9, decreased 2.4 percent to 923.72. The Dow Jones Industrial Average tumbled 187.13, or 2.1 percent, to 8,612.13.

Europe’s Dow Jones Stoxx 600 Index slumped 2.5 percent, and Japan’s Nikkei 225 Stock Average fell 1 percent.

U.S. Inventories

U.S. crude oil inventories probably fell in the week ended June 12, as refiners ramped up production and boosted stockpiles of gasoline and heating oil, a Bloomberg News survey showed.

Crude-oil supplies probably fell 2 million barrels last week from 361.6 million barrels the previous week, according to the median of five estimates by analysts before an Energy Department report tomorrow. All five forecast a drop.

Gasoline supplies probably rose 550,000 barrels in the week ended June 12 from 201.6 million the previous week. All of those surveyed said supplies climbed. Stockpiles during the same week last year fell 1.2 million barrels amid the peak motor fuel demand season in the U.S.

Brent crude for August delivery was untraded so far today. The contract lost $1.56, or 2.2 percent, yesterday to $70.24 a barrel on London’s ICE Futures Europe exchange. The July future expired yesterday at $69.44 a barrel.

FCPO Commentary on 16/06/09

FCPO 3rd month August Futures contract fall RM65 lower to close at RM2400 levels as compare to previous trading session with 11,204 lots traded in the market. CPO price plunge tracking closely on soybean oil and crude oil electronic trading performance.

Technically, CPO price yesterday manage to complete 178.6% and 78.6% Fibonacci projection at RM2384 regions while forms a Doji in the 2 – hourly chart. Based our technical interpretation, we suggest CPO might rebound in the coming trading session provided support levels at RM2380 and RM2350 were not violated in the coming trading session. Traders were advice to take profit on the existing short position while hold long position provided support levels were not violated. Resistance levels were seen at RM2465 and RM2520 regions.

FKLI Commentary on 16/06/09

FKLI futures June contract retrace 5 point lower to close at 1085.5 as compare to previous trading session with total 5,374 lots traded in the market. FKLI seems retrace mildly despite regional indices and Dow Jones electronic trading plunge during the trading session.

Technically, FKLI seems test support trend line for rising wedge in hourly chart. Based on our technical interpretation, we suggest that FKLI still seen topped around resistance levels at 1094 and 1110 regions. Cautious for short signal is considered favorable in terms of risk reward ration. Traders were advice to hold short position only provided support levels at 1073 and 1066 fails to hold against the selling pressure during trading session.

Palm Oil Drops as Intertek Says Exports Fall at Start of June

June 15 (Bloomberg) -- Palm oil futures fell after data showed that exports from Malaysia, the second-largest producer, dropped in the first half of this month as supply picked up.

Shipments from Malaysia dropped 10 percent to 560,416 metric tons in the first 15 days of June compared with the previous month, according to independent surveyor Intertek. The figures were released before the start of the day’s trade.

Last week, the nation’s Palm Oil Board said production had surged 8.5 percent to 1.4 million metric tons in May, lifting stockpiles for the first time in six months by 5.7 percent to 1.37 million tons compared with April.

“Exports are down,” Ong Chee Ting, an analyst at Maybank Investment, said from Kuala Lumpur. If that trend persisted, “prices would be slightly weaker this week,” Ong said.

August-delivery palm oil dropped as much as 1.8 percent to 2,420 ringgit ($687) a ton on the Malaysia Derivatives Exchange, before trading at 2,423 ringgit at 12:08 p.m. The price may fall to less than 2,000 ringgit in the second half, Ong added, when output is seasonally higher than the first six months.

Indonesia and Malaysia are the largest palm oil producers, accounting for about 90 percent of world output. Malaysian data is closely followed for industry trends. Indonesia doesn’t release monthly figures.

Palm oil prices fell for a second week last week after the Malaysian Palm Oil Board released the stockpiles, production and export data on June 10.

Dalian palm oil for September delivery dropped 1.4 percent to 6,472 yuan ($947) a ton at the 11:30 a.m. pause in trading. China is the largest user of palm oil.

OPEC Unlikely to Raise Oil Output in September, Qatar Says

June 14 (Bloomberg) -- OPEC, the supplier of 40 percent of the world’s oil, is unlikely to increase output when the group meets in Vienna in September, Qatar’s oil minister said.

“I don’t think so,” Abdullah bin-Hamad Al-Attiyah said today in an interview in Amsterdam when asked if the Organization of Petroleum Exporting Countries would need to raise production. “I would like to see where the real growth is, when the economic crisis reaches bottom and will take off again” before making a decision on oil output, he said.

Crude oil has climbed 62 percent this year, after plunging more than $100 in five months at the end of 2008 as the global recession curbed demand for the fuel. Oil futures closed above $70 a barrel on June 9 for the first time since November as the dollar dropped against most of its major counterparts, spurring investors to purchase energy futures and other commodities.

OPEC will only consider raising output when the price climbs to $100 a barrel, Kuwaiti Oil Minister Sheikh Ahmed al- Abdullah al-Sabah said last week. The group is scheduled to meet Sept. 9.

Crude oil for July delivery closed at $72.04 a barrel on the New York Mercantile Exchange on June 12. Oil is poised to reach $75 a barrel after rising above $73 on June 11, according to technical analysis by Newedge USA LLC.

Speculation

Speculation, lower inventories and an increase in demand are pushing the prices higher, Al-Attiyah said. He declined to comment on a year-end price target for crude.

Goldman Sachs Group Inc. forecast a surge to $85 a barrel by the end of the year. Crude prices are likely to rise to between $70 and $75 a barrel by the end of 2009 because of expectations for an economic recovery and a weak dollar, OPEC Secretary General Abdalla el-Badri said on June 4.

OPEC implemented 75 percent of planned output cuts of 4.2 million barrels a day in May, compared with 77 percent in April, the Vienna-based organization said in its monthly oil report on June 12. The International Energy Agency said the producer group complied with 74 percent of the reductions.

Al-Attiyah is on a three-day visit to the Netherlands and will meet with executives of Royal Dutch Shell Plc, one of the biggest investors in Qatar, and members of the government.

Gold Trades at Three-Week Low in Asia as Dollar Advances

June 15 (Bloomberg) -- Gold declined to the lowest in more than three weeks as a rallying dollar eroded interest in the precious metal as a haven investment.

The Dollar Index, which measures the greenback against six major trading partners, advanced for a second day after Russia’s Finance Minister Alexei Kudrin said the nation has full confidence in the U.S. currency. Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, have remained unchanged at 1,132.15 metric tons since June 5, according to figures on the company’s Web site.

“The gold price tumbled lower, affected by the firmer tone of the U.S. dollar,” David Moore, commodity strategist at Commonwealth Bank of Australia, said in an e-mail today.

Gold for immediate delivery fell as much as 0.4 percent to $935.20 an ounce, the lowest since May 20, and was at $937.18 by 8:30 a.m. in Singapore.

The fundamentals of the dollar are still in “good shape” Kudrin said in a June 13 television interview. The dollar was at $1.3976 per euro from $1.4016 in New York on June 12, and was at 98.14 yen compared with 98.43 yen. Bullion, denominated in dollars, tends to decline when the dollar strengthens.

Twelve of 29 traders, investors and analysts surveyed by Bloomberg News, or 41 percent, said gold would drop this week. Eleven forecast higher prices and six were neutral.

Among other precious metals for immediate delivery, silver declined 1.4 percent to $14.63 an ounce, the lowest since May 27. Platinum slid 1 percent at $1,242.50 an ounce and palladium was down 1.2 percent at $250.50 an ounce as of 8:34 a.m. Singapore time.

Oil Falls for a Second Day After Confidence in Recovery Falters

June 15 (Bloomberg) -- Oil fell for a second day on speculation its dollar-driven rally to a seven-month high last week outpaced prospects for a recovery in fuel demand.

A report today in the U.S., the world’s largest oil consumer, may show manufacturing in New York state contracted for a 14th month. OPEC members are waiting for signs of economic recovery and are unlikely to increase production when the group next meets in September, Qatar Oil Minister Abdullah bin-Hamad Al-Attiyah said yesterday.

“Some of these commodities really have put on some pretty solid gains without really much fundamental basis,” said Toby Hassall, research analyst at Commodity Warrants Pty in Sydney. Oil “is vulnerable to some corrective action, especially if we see further strength in the dollar.”

Crude oil for July delivery fell as much as 48 cents, or 0.7 percent, to $71.56 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $71.57 a barrel at 9:10 a.m. in Singapore.

The contract fell 0.9 percent to $72.04 a barrel on June 12, its first decline in four days, after a worse-than-expected plunge in European industrial production dented confidence in the global recovery and boosted the dollar, reducing the investment appeal of commodities. Oil reached $73.23 on June 11, the highest since Oct. 21.

“There are increased signs of stabilization in our economies,” finance ministers from the Group of Eight nations said June 13. Still, “the situation remains uncertain,” the group said.

Oil Rally, Dollar

New York oil futures have gained 46 percent in the past two months, as the dollar fell 5.6 percent against a basket of six major currencies.

The dollar rose for a second day today, trading at $1.3984 to the euro in early Asian trading, from $1.4016 late in New York last week.

“The first couple of sessions this week will really tell us if this rally remains intact” for oil, Hassall said. Even if prices press higher as the global economy strengthens, “it’s difficult to see us hitting $100 by the end of the year,” he said.

Brent crude for July delivery fell as much as 42 cents, or 0.6 percent, to $70.50 a barrel on London’s ICE Futures Europe exchange. The contract, which expires today, fell 87 cents, or 1.2 percent, to settle at $70.92 a barrel on June 12.

The more actively traded August contract declined as much as 41 cents, or 0.6 percent, to $71.39 a barrel.

Militants, Net-Longs

Militant rebels in Nigeria, Africa’s biggest oil producer and the sixth-largest in OPEC, blew up two oil wells and pipelines at the Chevron Corp.-operated Makaraba field, the Movement for the Emancipation of the Niger Delta said yesterday.

OPEC pumps about 40 percent of the world’s oil. The group last week lowered its 2009 demand forecast to 83.8 million barrels a day, from 84.03 million a month earlier. Daily consumption may climb to 84.6 million barrels in the fourth quarter from 83 million now and 84.9 million in the fourth quarter of 2008, it said June 12.

Hedge-fund managers and other large speculators increased their net-long position in New York crude-oil futures in the week ended June 9, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 47,883 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose 8,196 contracts, or 21 percent, from a week earlier.