FKLI Commentary on 06/07/09

FKLI futures July contract rose 3.5 point higher to close at 1074 as compare to previous trading session with total 6,170 lots traded in the market. FKLI rebound despite Dow Jones were traded weak during overnight trading as most of the regional indices turn green before trading session end.

Technically, FKLI seems temporary support above July futures contract previous low at 1063.5 levels. Based our technical knowledge, our opinion suggest FKLI likely undergoing consolidation phase with 1063 and 1085.5 range. However, FKLI temporary resistance levels seen at 1077.5 and 1087 regions. Traders were suggest to hold short position provided resistance levels were not violated while be extra alert around support levels at 1070 and 1062 regions.

FCPO Commentary on 06/07/09

FCPO 3rd month Sept Futures contract traded unchanged to close at RM2175 levels as compare to previous trading session with 10,915 lots traded in the market. CPO price was traded lower as soybean oil and crude oil overnight trading was closed weak but latter recovered due to heavy profit taking activities over holiday ahead.

Technically, CPO finally reach our projected target around RM2093 region, 50% Fibonacci retrace levels. Based on our technical interpretation, our opinion suggests CPO wound seen temporary bottomed around RM2075 to RM2090 regions. However, despite of immediate trend reversal, we suggest CPO would consolidate short while before a new bull trend is confirmed. Trend trader were advice to slowly collect position in the coming trading session where support seen RM2100 and RM2075. Resistance levels were seen at RM2209 and RM2233 levels.

Oil Set for Third Weekly Loss After U.S. Unemployment Increases

July 3 (Bloomberg) -- Crude oil extended its losses, poised for a third week of declines, after a U.S. report showed unemployment in the world’s largest energy consuming nation rose to the highest in almost 26 years last month.

Oil dropped more than $2 a barrel yesterday after the Labor Department said employers cut 467,000 jobs in June, a signal that U.S. fuel demand will be slow to rebound. Crude also fell as equities dropped and the dollar climbed against the euro.

“The negative jobs report was not taken well by the equities or oil market,” said Mike Sander, an investment adviser with Sander Capital in Seattle. “Helping to push oil lower was a fall in the Dow Jones by over 200 points and a drop in the euro back to $1.40.”

Crude Oil for August delivery dropped as much as 42 cents, or 0.6 percent, to $66.31 a barrel on the New York Mercantile Exchange, and was at $66.45 at 9:14 a.m. in Sydney. Oil fell $2.58 to $66.73 yesterday. Futures are down 3.9 percent this week.

June’s employment decline was more than forecast and followed a 322,000 decrease in May. Payrolls were estimated to fall 365,000 after a 345,000 drop initially reported for May, based on the median of 79 economists surveyed by Bloomberg News.

The jobless rate jumped to 9.5 percent, the highest since 1983, from 9.4 percent. U.S. fuel supplies increased last week by more than analysts forecast.

Stocks Drop

The Standard & Poor’s 500 Index tumbled 2.9 percent to 896.42, extending its slump since June 12 to 5.3 percent and erasing its 2009 gain. The Dow Jones Industrial Average fell the most since April 20.

Declining crude oil and gasoline prices helped send the Reuters/Jefferies CRB Index of 19 raw materials lower. The index dropped 1.8 percent to 246.60.

A rising dollar makes raw materials such as oil and gold less attractive to investors. The dollar traded at $1.3944 per euro at 8:43 a.m. in Tokyo, after advancing 1 percent yesterday.

There will be no floor trading in New York today because of the Independence Day holiday. All electronic trading will be counted as part of the session on July 6.

Gasoline for August delivery declined 1.1 cents, or 0.6 percent, to $1.78 a gallon at 8:22 a.m. Sydney time in New York. Yesterday, it fell 7 cents, or 3.8 percent, to $1.789 a gallon. Futures touched $1.7822, the lowest since May 26.

Oil Supply

Kuwaiti Oil Minister Sheikh Ahmed al-Sabah said oil prices above $100 would weaken the global economy. There is an oversupply of oil in the market and if the situation continues, OPEC will “definitely” not increase output in the group’s next meeting on Sept. 9, he told reporters in Kuwait City yesterday.

“Hopefully in the third and fourth quarter it won’t surpass the $100 mark because this will fuel recession again,” Sheikh Ahmed said.

The Organization of Petroleum Exporting Countries, in a meeting May 28 in Vienna, decided against cutting production targets because of concern higher prices might harm an ailing global economy. The group increased output for a third month in June, a Bloomberg News survey showed. Members pumped an average 28.23 million barrels a day last month, up 55,000 from May.

Brent crude oil for August settlement yesterday declined $2.33, or 3.4 percent, to $66.46 a barrel on London’s ICE Futures Europe exchange.

Soybean Prices Slide on Signs of Declining Demand; Corn Drops

July 2 (Bloomberg) -- Soybeans fell for the fifth time in six sessions on speculation that demand from oilseed processors is dropping. Corn futures also declined, marking the biggest weekly drop in seven months.

The so-called spot-basis bid, or premium offered for soybeans in New Orleans, fell to $1.44 to $1.55 a bushel above August futures traded in Chicago yesterday, from $1.50 to $1.63 a day earlier, the U.S. Department of Agriculture reported yesterday. A lower basis bid signals less demand from processors that turn the oilseeds into meal and oil.

“We’re seeing some cash-basis levels drop off, which may be a sign that meal demand has waned a little bit,” said Darrell Holaday, the president of Advanced Market Concepts in Manhattan, Kansas. “Processors are finding it hard to move meal at this price level. If demand for meal drops off enough, they’ll back that basis off for beans. That indicates demand has started to wane at these price levels.”

Soybean futures for November delivery fell 9.5 cents, or 0.9 percent, to $10.06 a bushel on the Chicago Board of Trade. The price still rose 1.5 percent for the week after jumping 3.5 percent yesterday, the most since June 4. The CBOT is closed tomorrow to mark the Independence Day holiday on July 4.

Corn fell after a government report showed U.S. farmers seeded more than expected and as crude-oil futures declined, reducing demand for ethanol made from the grain.

Crude Oil Slides

About 87.035 million acres were probably seeded with corn this year, the USDA said on June 30, more than the 85.982 million expected by analysts surveyed by Bloomberg News. Crude oil fell as much as 4.1 percent today. When oil falls, demand for alternative fuels including ethanol wanes.

“During the first half of the week, corn was hammered by the acreage report and the last half by the reversal in crude prices,” Holaday said. “Oil has made major reversals, and that’s going to weigh on corn.”

Corn futures for December delivery fell 11.75 cents, or 3.2 percent, to $3.575 a bushel in Chicago. The price dropped 12 percent this week, the biggest weekly decline since Dec. 5. The most-active contract reached a seven-month high of $4.50 on June 2 as cold, wet weather in the U.S. Midwest threatened to reduce crop yields.

Corn is the biggest U.S. crop, valued at $47.4 billion in 2008, with soybeans in second place at $27.4 billion government figures show. The U.S. is the largest producer and exporter of both crops.

India soybean, soyoil down on sowing, Malaysian palm

MUMBAI, July 2 (Reuters) - Indian soybean and soyoil futures ended down on Thursday as farmers in top producing states began sowing and the process is likely to pick up in coming days, analysts, traders and an official in a leading trade body said.

A sharp fall in Malaysian palm oil prices also weighed on the markets. Palm oil and soyoil compete as edible oil and their prices often move in tandem.

Malaysian palm futures dropped 3.7 percent to the lowest level in nine trading days on Thursday as investors focused on weak demand after crude oil tumbled, traders said. [ID:nJAK506311]

Soybean sowing has begun in central state of Madhya Pradesh and western state of Maharashtra, country's top two producers, after rains early this week.

"The sowing has started but is yet to gather momentum... The rains have been widespread, though scanty," Uday S. Kamat, an oilseed crusher in Nagpur in Vidharbha region of Maharashtra, said.

Large-scale sowing may push up supplies and subdue prices.

In 2008/09 crop year the two states accounted for nearly 85 percent of total soybean area of about 9.62 million hectare.

As per latest forecast by the weather department, rains are expected in most parts of central and western India, a key soybean growing region.

"Some sowing has started in Madhya Pradesh," an official in the Soybean Processors' Association said.

Soybean cultivation has been delayed by almost a fortnight in Maharashtra, and by at least one week in Madhya Pradesh, the largest producer, due to poor rains.

"The delay may not impact much...if rains are good we can make up for the lost time," Kamat said.

Yen, Dollar Strengthen as U.S. Job Cuts Boost Demand for Safety

July 3 (Bloomberg) -- The yen and the dollar rose for a second day against the euro after a U.S. government report showed employers cut more jobs last month than economists forecast, boosting demand for the safety of the two currencies.

The yen advanced against all 16 major currencies on speculation declines in Asian stocks will spur investors to sell higher-yielding assets. The euro headed for a weekly loss versus the dollar before a European report today that economists say will show retail sales fell in May, signaling the 16-nation region’s economy will take time to recover.

“The markets are getting a dose of reality after becoming over-optimistic on the worldwide rebound,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank. “Risk aversion is back, and the bias is for the yen and the dollar to be bought.”

The yen advanced to 133.61 per euro as of 9:22 a.m. in Tokyo from 134.34 yesterday in New York. The dollar climbed to $1.3960 per euro from $1.4003 yesterday, after earlier rising to $1.3929, the highest level since June 25. The U.S. currency declined to 95.74 yen from 95.94 yen.

The pound dropped 0.3 percent to $1.6351, and the Swiss franc weakened 0.3 percent to 1.0875 per dollar. Currency movements may be volatile in Asia as a national holiday in the U.S. reduces liquidity, Societe Generale’s Saito said.

South Korea’s won led Asian currencies lower after stocks in the region fell. The MSCI Asia-Pacific Index declined 1 percent, and the Nikkei 225 Stock Average fell 1.7 percent. The won dropped 0.5 percent to 1,276.40 per dollar.

Job Losses

The yen strengthened for a second day against the pound after the U.S. Labor Department said yesterday employers cut 467,000 jobs in June after a revised decrease of 322,000 the previous month. The median forecast of economists surveyed by Bloomberg News was for a reduction of 365,000. The unemployment rate rose to 9.5 percent from 9.4 percent.

“Poor economic data may damp appetite for riskier assets,” said Masafumi Yamamoto, head of foreign-exchange strategy for Japan at Royal Bank of Scotland Group Plc in Tokyo and a former Bank of Japan currency trader. “There’s a high possibility this will lead to strength in the dollar and the yen and weakness in commodity currencies such as the Australian and New Zealand dollars.”

The yen typically strengthens in times of financial turmoil as Japan’s trade surplus makes the currency attractive as it means the nation does not have to rely on overseas lenders, and the dollar is bought as it is the world’s main reserve currency.

FCPO Commentary on 03/07/09

FCPO 3rd month Sept Futures contract plunge RM84 lower to close at RM2175 levels as compare to previous trading session with 10,822 lots traded in the market. CPO price was traded lower as soybean oil and crude oil electronic trading change direction despite was traded firm on overnight trading.

Technically, CPO price seems temporary support at 61.8% Fibonacci projection levels at RM2170 regions. Based on our technical interpretation, our opinion suggest CPO price would continue traded lower in the coming trading session where resistance levels seen at RM2209 and RM2235 regions. Traders were advice to hold position on rebound while support seen at RM2145 and RM2093 levels.

FKLI Commentary on 03/07/09

FKLI futures July contract fall 12.5 point lower to close at 1070.5 as compare to previous trading session with total 7,086 lots traded in the market. FKLI was traded lower as regional indices sudden plunge despite were traded profit during earlier session.

Technically, FKLI seems forms a double top formation in the July price chart where neckline seen at 1068 levels. Based on our technical knowledge, our opinion suggest us that strong sell signal occur if support levels at 1068 and 1052 were violated. Traders were suggest to hold short position in the coming trading session while be cautious around resistance level 1077 and 1086 regions.

Soybean Futures Gain in Chicago on Concerns of Supply Shortage

July 2 (Bloomberg) -- Soybean futures rose for a second day in Chicago on concern smaller-than-expected plantings in the U.S., the world’s biggest exporter, raises the risk of a global supply shortage.

More rain is needed for planting and developing soybeans in much of southern U.S., weather forecaster Meteorlogix LLC said yesterday. The U.S. Department of Agriculture said June 30 farmers will sow a record 77.483 million acres with soybeans. That compared with an average of 78.16 million acres forecast in a Bloomberg News survey of 24 analysts. Inventories are forecast to drop to a 32-year low of 110 million bushels by Aug. 31.

“There are concerns about potential supply disruptions or potential supply shortages,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia in Sydney said by phone today. “If the U.S. fields are hurt for whatever reason, then the fact that they’ve got a lower than expected area in the ground” will mean global supplies will remain tight, he said.

Soybeans for November delivery, after the U.S. harvest, rose as much as 1.3 percent, to $10.29 a bushel in after-hours electronic trading on the Chicago Board of Trade. The contract was at $10.185 a bushel at 11:13 a.m. Singapore time.

Wheat for September delivery, the contract with the most open interest, gained as much as 1 percent to $5.4075, and was at $5.3725 a bushel 11:08 a.m. in Singapore. Wheat for July delivery, the contract with the most volume, added 0.9 percent to $5.11 a bushel.

Areas planted to soybeans in the north China plain “have turned very hot and dry during the past week, increasing stress to this portion of the crop after earlier showers,” Meteorlogix said yesterday.

China Weather

Key soybean, wheat and corn growing areas in Hebei, Shandong and Henan in China “are likely to remain mostly dry with some extreme heat during the next five to seven days, as the monsoon gets only as far north as the Yangtze river valley,” Meteorlogix said in a global weather report.

The affect of dry weather in China on crops including soybeans and wheat “is something that needs to be monitored,” Commonwealth Bank’s Mathews said. “That may be another factor which will help Chinese soybean imports from countries such as the U.S.” and from South America, he said.

In the export market, Japan plans to buy 108,000 tons of the grain today, including 87,000 tons from the U.S. Taiwan is seeking 82,350 tons of wheat in a tender.

Dry weather and some hot temperatures in the spring wheat areas of the Urals in Russia and west Kazakh will increase stress to the crop, Meteorlogix said in its 48-hour forecast published yesterday.

Russia is tied with Canada as the world’s second-largest exporter of wheat, flour and wheat products, while Ukraine is number 4, according to USDA estimates on June 10.

December-delivery corn lost as much as 0.6 percent to $3.67 a bushel in Chicago and was at $3.675 at 11:20 a.m. Singapore time.

Oil Little Changed Near $69 After Drop on U.S. Fuel Supply Gain

July 2 (Bloomberg) -- Crude oil traded little changed near $69 a barrel after falling yesterday as a U.S. government report showed fuel supplies in the world’s biggest energy-consuming country rose more than forecast.

Gasoline stockpiles increased 2.33 million barrels to 211.2 million in the week ended June 26, the Energy Department said. Inventories were estimated to rise by 2 million barrels, according to a Bloomberg News survey.

“Supply and consumption remain really bad,” said Bill O’Grady, the chief markets strategist at St. Louis-based Confluence Investment Management LLC, an investment advisory and management firm. “It’s hard to make a bullish case for anything.”

Crude oil for August delivery gained 19 cents to $69.50 a barrel on the New York Mercantile Exchange at 9:14 a.m. in Sydney. Yesterday, the contract fell 58 cents, or 0.8 percent, to settle at $69.31. Prices are up 25 percent since the start of the year.

Oil in New York increased 41 percent last quarter, the biggest gain since 1990. Prices have rallied as rebounding world equity markets and a weaker dollar encouraged investors to buy the commodity as an alternative investment and inflation hedge.

The dollar was at $1.4149 against the euro at 6:22 a.m. in Tokyo following a 0.8 percent decline.

Total U.S. daily fuel demand in the four weeks ended June 26 was down 5.8 percent from a year earlier, the Energy Department said yesterday. Gasoline consumption averaged 9.17 million barrels a day, up 0.9 percent. Distillate-fuel demand over the period fell 9.4 percent to 3.4 million barrels a day.

Distillate Fuels

Stockpiles of distillate fuel, a category that includes diesel and heating oil, gained 2.9 million barrels to 155 million, the highest since 1987. Distillate-fuel supplies were forecast to increase 1.5 million barrels, according to the median of 15 analyst responses in the Bloomberg News survey.

Gasoline for August delivery rose 0.33 cents to $1.8623 a gallon at 8:46 a.m. in Sydney. Yesterday, it declined 4.3 cents, or 2.3 percent, to end the session at $1.859 in New York.

Crude oil supplies fell 3.66 million barrels to 350.2 million, the report showed. Inventories have dropped 15.8 million barrels in the past four weeks, the biggest four-week decline in a year. Stockpiles last week were 8 percent higher than the five-year average for the period, the department said.

The Organization of Petroleum Exporting Countries increased production for a third month in June, a Bloomberg News survey showed yesterday. Oil output averaged 28.23 million barrels a day last month, up 55,000 from May, according to the survey of oil companies, producers and analysts. The 11 OPEC members with quotas, all except Iraq, pumped 25.86 million barrels a day, 1.015 million more than their target.

Brent crude oil for August settlement declined 51 cents, or 0.7 percent, to end yesterday’s session at $68.79 a barrel on London’s ICE Futures Europe exchange.

Gold Rises, Halting Two-Day Drop, as Weak Dollar Boosts Demand

July 1 (Bloomberg) -- Gold gained the most in a week, halting a two-day slide, as a weaker dollar boosted the metal’s appeal as an alternative investment.

The dollar fell as much as 1.1 percent against the euro as a report from Automatic Data Processing Inc.’s Employer Services unit showed U.S. companies cut 473,000 jobs last month, more than forecast. Gold typically rises when the dollar falls because some investors buy the precious metal to protect value when the world’s reserve currency weakens.

“With the amount of money that has been put into the banking system, you do have an inflation potential,” Hans Goetti, who oversees about $10 billion as LGT Bank in Liechtenstein (Singapore) Ltd.’s chief investment officer, said in a Bloomberg Television interview.

Gold futures for August delivery rose $13.90, or 1.5 percent, to $941.30 an ounce on the New York Mercantile Exchange’s Comex unit. Bullion for immediate delivery gained $14.16, or 1.5 percent, to $940.76 an ounce at 8:01 p.m. in London.

“In the long term, gold as a currency will go up because gold is not backed by credit,” Goetti said. “We are long-term bulls on gold. In inflation-adjusted terms, we are still way below where we were in 1980.”

June employment figures are set to be reported tomorrow by the U.S. Department of Labor. The government and most U.S. markets will be shut on July 3 ahead of a July 4 holiday.

Near-Term Outlook

“Near term, it’s a bit of a different story,” Goetti said. “There is a lot of resistance at around the $1,000 level. We could see a move to $1,000, maybe a pullback then. There is always a threat of central banks selling, IMF selling.”

The metal rose to $938.25 an ounce in the afternoon “fixing” in London, the price used by some mining companies to sell their output, from $931.50 in the morning.

Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, declined by 5.19 metric tons to 1,120.55 tons as of yesterday, the company’s Web site showed.

“Investors are slowly and steadily shifting their investments into high-yielding assets, like currencies and equities,” Pradeep Unni, a Richcomm Global Services analyst in Dubai, said in a note.

Silver for September delivery rose 16 cents, or 1.2 percent to $13.760 an ounce in New York. Silver surged 22 percent this year and gold gained 6.5 percent.

Dollar Near 3-Week Low as U.S., China Manufacturing Buoy Stocks

July 2 (Bloomberg) -- The dollar traded near a three-week low against the euro after U.S. and Chinese factory reports added to evidence the global recession is easing, boosting demand for higher-yielding assets.

The euro traded close to a two-week high versus the yen on speculation the European Central Bank will keep interest rates unchanged at a meeting today, encouraging investors to seek higher returns in the 16-nation region. The dollar was little changed against the British pound before a U.S. Labor Department report today that economists said will show the nation lost jobs for an 18th consecutive month.

“Economic data are helping to improve investor sentiment,” said Danica Hampton, a currency strategist in Wellington at Bank of New Zealand Ltd., the country’s third- largest lender. “This may reduce ‘safe-haven’ demand for the dollar and the yen.”

The dollar traded $1.4138 per euro as of 8:45 a.m. in Tokyo from $1.4142 in New York yesterday, when it reached $1.4201, the lowest level since June 5. The euro was at 136.48 yen from 136.70 after touching 136.89 yesterday, the strongest since June 15. The U.S. currency fetched 96.53 yen from 96.65 yen. The dollar was at $1.6482 per pound from $1.6478.

The Standard & Poor’s 500 Index advanced 0.4 percent yesterday after posting a 15 percent second-quarter rally.

The greenback rose to an eight-day high against the yen in New York yesterday before today’s jobs report. Employers eliminated 365,000 jobs last month after May’s 345,000 decrease, according to a Bloomberg News survey of economists.

U.S., China Manufacturing

U.S. manufacturing shrank in June at the slowest pace in 10 months, the Institute for Supply Management reported yesterday. The Tempe, Arizona-based group’s factory index rose to 44.8, the highest level since August, from 42.8 in May. Readings below 50 signal contraction.

China’s manufacturing expanded for a fourth month. The official Purchasing Managers’ Index rose to a seasonally adjusted 53.2 last month from 53.1 in May, the Federation of Logistics and Purchasing said yesterday. A reading above 50 indicates an expansion.

The euro rose against the dollar yesterday as retail sales in Germany, Europe’s largest economy, unexpectedly increased for a third month in May. A European Central Bank council member, Axel Weber, who heads the Bundesbank, said last week policy makers have used up their scope to cut rates.

The ECB will leave its benchmark interest rates at 1 percent today, according to the median estimate of economists surveyed by Bloomberg News. The euro area’s benchmark compares with 0.1 percent in Japan and as low as zero in the U.S.

Oil Rises After Industry Report Shows Drop in Crude Inventories

July 1 (Bloomberg) -- Oil rose above $70 after an industry report showed the biggest decline in crude inventories since September in the U.S., the world’s largest user of the fuel.

Crude supplies fell by 6.8 million barrels to 349.7 million last week, the industry-funded American Petroleum Institute said yesterday. A U.S. Energy Department report today will probably show crude-oil stockpiles declined 2 million barrels, according to the median of 15 estimates in a Bloomberg News survey.

“A fall in crude inventories will cause the market to move higher,” said Mike Sander, an investment adviser with Sander Capital in Seattle. Should the government report also show a decline “it will reinforce crude to stay at or go above current levels,” he said.

Oil for August delivery gained as much as 86 cents, or 1.2 percent, to $70.75 a barrel on the New York Mercantile Exchange, and was at $70.63 at 9:57 a.m. Sydney time. Oil dropped 2.2 percent from an eight-month high yesterday to $69.89, after a decline in June U.S. consumer confidence.

Oil in New York posted a 41 percent quarterly gain, the biggest since 1990. Prices have rallied as rebounding world equity markets and a weaker dollar encouraged investors to buy the commodity as an alternative investment.

The U.S. currency traded at $1.4035 versus the euro at 6:03 a.m. in Tokyo, following a 0.4 percent gain yesterday.

Fuel Supply Rise

The Energy Department report, due at 10:30 a.m. in Washington, will probably show that U.S. fuel inventories rose last week and gasoline supplies climbed 2 million barrels, according to the survey. Stockpiles of distillate fuel, a category that includes heating oil and diesel, increased 1.5 million barrels.

The 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.

Total U.S. daily fuel demand in the four weeks ended June 19 was down 6.6 percent from a year earlier, the Energy Department said last week.

Gasoline for August delivery gained 2 cents, or 1 percent, to $1.9220 a gallon at 8:28 a.m. Sydney time in New York. Yesterday, it declined 3.34 cents, or 1.7 percent, to end the session at $1.9020 a gallon in New York. U.S. gasoline inventories rose 209,000 barrels last week, the API said yesterday.

Brent crude oil for August settlement fell $1.69, or 2.4 percent yesterday, to end the session at $69.30 a barrel on London’s ICE Futures Europe exchange.

Yen Gains After Bank of Japan’s Tankan Rises From Record Low

July 1 (Bloomberg) -- The yen rose against all 16 of the most-active currencies after the Bank of Japan’s Tankan survey showed sentiment among the largest manufacturers rebounded from a record low.

The U.S. dollar traded near a six-week high against the Canadian dollar after an industry report showed an unexpected drop in U.S. consumer confidence for June, increasing demand for the safety of the world’s main reserve currency. Australia’s dollar and Norway’s krone declined yesterday as crude oil tumbled, reducing the revenue of commodity exporters.

“A better Tankan will lift the yen today,” said Adam Carr, a senior economist in Sydney at ICAP Australia Ltd., part of the world’s largest interbank broker. “That’s specifically for Japan, which is doing relatively better.”

The yen rose to 135.12 per euro as of 9:01 a.m. in Tokyo from 135.21 in New York yesterday. It climbed to 96.23 per dollar from 96.36. The U.S. currency bought $1.4043 versus the euro from $1.4033.

Australia’s dollar was at 80.69 U.S. cents from 80.64 cents in New York yesterday. The krone traded at 6.4318 per dollar from 6.4311. The greenback was little changed at C$1.1621.

The BOJ’s index of sentiment among large makers of electronics, cars and other products rose to minus 48 from minus 58 in March, the Tankan survey showed. Economists surveyed by Bloomberg News predicted minus 43. A negative number means pessimists still outnumber optimists.

FKLI Commentary on 01/07/09

FKLI futures June contract fall marginally 1 point lower to close at 1079 as compare to previous trading session with total 4,357 lots traded in the market. FKLI plunge during trading session as news release on corporate finance especially regarding public listing and IPO by our prime minister.

Technically, FKLI started to plunge down once support trend line in the hourly chart was breach around 1082.5 levels. Based on our technical interpretation, FKLI will continue to trade lower in the coming trading session provided resistance levels at 1081 and 1086 regions were not violated during trading session. Traders were advice to hold short position while be cautious around support levels at 1059 and 1052 regions.

FCPO Commentary on 01/07/09

FCPO 3rd month Sept Futures contract fall RM32 lower to close at RM2230 levels as compare to previous trading session with 9,971 lots traded in the market. CPO price plunge despite crude oil and soybean oil overnight and electronic was traded firm.

Technically, CPO manage to rebound 61.8% Fibonacci retrace levels at RM2294 regions in the early trading and starts to plunge after manage to breach previous support levels at RM2270 regions. Our technical analyst suggest that CPO would trade lower in the coming trading session provided resistance levels at RM2250 and RM2275 must not be violated during trading session. Traders were advice to hold short position in the coming trading session while be cautious around support levels at RM2209 and RM2093 regions.

IEA Cuts 5-Year World Oil Demand Outlook on Economy (Update2)

June 29 (Bloomberg) -- The International Energy Agency, an adviser to oil-consuming nations, cut five-year forecasts for global crude demand because of the economic slump, predicting consumption won’t regain last year’s levels until 2012.

The IEA cut its oil demand estimates for every year through 2013 by about 3 million barrels a day, it said in its Medium- Term Oil Market Report today. Consumption will average 86.76 million barrels a day in 2012, the first year it will rise above 2008’s level of 85.76 million barrels a day, according to the Paris-based agency.

The worst global economic crisis since World War II has crimped oil demand in developed economies and slowed growth in China and India. While the drop in consumption has postponed the threat of a potential oil supply shortfall, risks remain as the recession forces companies to cut spending on new production, according to the IEA’s executive director Nobuo Tanaka.

“There is so much uncertainty about the economic recovery and how fast it may happen,” Tanaka said in an interview after the report’s release in Paris today. “We may have a supply crunch again, just like last year, in 2014 to 2015. If the economic recovery is slower, we could have ample supply capacity.”

Crude oil has climbed 59 percent this year to more than $71 a barrel in New York on increasing optimism the global economic slump may be ending. Still, the World Bank said June 22 the recession will be deeper than it expected three months ago. Analyst estimates compiled by Bloomberg show the rally may reverse over the next three months as supply outstrips demand and speculators sell.

Annual Increases

Oil demand in 2014 will rise to 88.99 million barrels a day, according to the IEA. From 2009, when oil demand will fall the fastest since the early 1980s, that represents an average annual increase of about 1.4 percent, or 1.2 million barrels a day. From 2008 levels it represents an average increase of 0.6 percent, or 540,000 barrels a day.

The IEA’s oil demand estimates reflect a “higher GDP scenario” based on the International Monetary Fund’s forecasts for global economic growth made in April. The IMF expects world economic expansion to reach nearly 5 percent a year between 2012 and 2014, the IEA said.

In its “lower GDP scenario,” which assumes that a rebound in the global economy will be 3 percent a year, the IEA said global oil demand could fail to reach last year’s levels by 2014, standing at 84.92 million barrels a day, 6.34 million barrels less than predicted in December.

‘Market Turmoil’

“Many see the lower variant, or something close to it, as a more likely outcome, so profound could be the fallout from the recent financial and economic market turmoil,” the IEA said in the report.

Consumption in developed economies will shrink 1.1 percent a year to 44.4 million barrels a day in 2014, even under the higher GDP scenario, according to the IEA estimates. According to the lower economic growth estimate, OECD demand may shrink as much as 1.5 percent.

Demand in developing economies outside the Organization for Economic Cooperation and Development will rise through 2014. Oil use in those countries will increase an average 2.6 percent a year to 44.6 million barrels a day, according to the IEA.

Tempers Demand

While the economic slump tempers global demand growth, it may also cause supply to shrink as lower exploration and production spending delays projects and reduces spare capacity, according to the IEA.

Supplies from outside OPEC are forecast to decline by 0.4 million barrels a day between 2008 and 2014, compared with six- year growth of 1.5 million barrels a day forecast in the last report, the IEA said. The biggest revisions are in the former Soviet Union and North America, where projects to develop Canada’s oil sands are being delayed, the IEA said.

The group predicts that non-OPEC supply will peak at 51.12 million barrels a day in 2011 and start declining thereafter, reaching 50.22 million barrels a day by 2014.

As new oil projects are delayed, the IEA estimates global oil capacity to increase 4 million barrels a day by 2014, compared with its previous estimate of 5.5 million barrels a day. Spare production capacity in OPEC countries will drop “substantially” below 5% of global demand in the following two years, it said.

“Supply capacity growth is going to be constrained over the next five years,” David Fyfe, head of the IEA’s oil industry and markets division, said in an interview in Paris today. “With lower prices and lower spending in 2009, we think supply-capacity growth is going to be very sticky.”

The Medium-Term report, a publication was introduced as a bridge between the agency’s monthly reports, which give two-year forecasts, and its annual world energy outlook, which has 25- year projections.

Crude Oil Trades Above $71 After Rising on Nigeria Field Attack

June 30 (Bloomberg) -- Crude oil traded little changed above $71 after rising yesterday when an attack by Nigerian militants shut a field operated by Royal Dutch Shell Plc, reducing output from Africa’s largest producer.

Shell said it closed the Estuary field near the Forcados export terminal after the assaults. Oil is poised for a quarterly gain of 44 percent, the biggest since 1990. The International Energy Agency, an adviser to 28 developed nations, lowered its five-year forecast for global crude demand because of the economic slump.

“Nigeria exports roughly 2 million barrels a day of crude oil, which is not a huge percent of global supply, but any disruption to global supplies will cause prices to go up,” said Mike Sander, an investment adviser with Sander Capital in Seattle.

Crude oil for August delivery fell 3 cents to $71.46 on the New York Mercantile Exchange at 8:59 a.m. in Sydney. Yesterday, the contract gained $2.33, or 3.4 percent, to settle at $71.49 a barrel, the highest close since June 12.

Hostilities in the Niger River delta have cut more than 20 percent of the country’s oil exports since 2006. Shell closed the Estuary field after attacks on production wells, Tony Okonedo, a spokesman, said by phone from Lagos yesterday. The Movement for the Emancipation of the Niger Delta said it attacked the field.

Rejected Amnesty

The militant group on June 25 rejected an amnesty proposal from President Umaru Yar’Adua, saying the offer failed to address key issues. Under the terms, fighters in the Niger River delta have until Oct. 4 to surrender their weapons, renounce violence and accept rehabilitation to avoid prosecution.

A U.S. government report will probably show that crude-oil inventories dropped for the seventh time in eight weeks. Supplies slipped 1.6 million barrels in the week ended June 26, according to the median of nine estimates by analysts surveyed by Bloomberg News. The Energy Department is scheduled to release its weekly report tomorrow at 10:30 a.m. in Washington.

The IEA cut its oil-consumption estimates for every year through 2013 by about 3 million barrels a day, the agency said in the Medium-Term Oil Market Report yesterday. Consumption will average 86.76 million barrels a day in 2012, the first year demand will rise above 2008’s level of 85.76 million, according to the Paris-based agency.

Gasoline for July delivery climbed 6.17 cents, or 3.3 percent, to $1.9358 a gallon in New York, the highest settlement since June 18. It was the biggest one-day increase since May 18.

The Organization of Petroleum Exporting Countries is unlikely to raise output at the group’s next meeting in September, oil ministers from Algeria and Qatar said yesterday.

“It would be very difficult to think of an increase in production at this stage” as the market is “oversupplied,” Chakib Khelil, Algeria’s oil minister, told reporters in Doha, where he and Qatari minister Abdullah bin Hamad al-Attiyah are attending the Gas Exporting Countries Forum.

Brent crude oil for August settlement yesterday rose $2.07, or 3 percent, to $70.99 a barrel on London’s ICE Futures Europe exchange, the biggest gain since June 4.

Yen Falls to 2-Week Low Against Euro as Risk Appetite Improves

June 30 (Bloomberg) -- The yen fell to a two-week low against the euro after European reports showed an improvement in euro area confidence, boosting demand for higher-yielding assets.

The Swedish krona was the best performer against the dollar among the 16 most-traded currencies tracked by Bloomberg yesterday as investors purchased Scandinavian debt. The euro gained yesterday the most in four weeks versus the yen as a European Commission executive and consumer sentiment index rose, adding to signs record low rates are countering the recession.

“Risk appetite is on the menu,” said Alex Sinton, a senior dealer at ANZ National Bank Ltd. in Auckland. “At this point people are comfortable taking on board risk.”

The yen fell to 135.62 per euro as of 8:40 a.m. in Tokyo from 135.31 in New York yesterday, after earlier dropping to 135.74, the lowest level since June 15. Japan’s currency was at 96.16 per dollar from 96.06. The dollar bought $1.4104 per euro from $1.4083. It was little changed at 7.66 per krona.

The krona rose 1.8 percent to 7.66 versus the dollar yesterday as Swedish debt advanced. The yield on the 4.25 percent bond due in March 2019 declined for a seventh day, dropping 0.02 percentage point to 3.44 percent. Prices move inversely to yields.

The yen dropped 1.7 percent to 12.28 versus the South African rand and depreciated 2.4 percent to 12.50 against the krona after the European Commission said in Brussels yesterday that an index of executive and consumer sentiment in the 16 nations that use the euro advanced this month to 73.3, the highest level since November, from a revised 70.2 in May.

FKLI Commentary on 30/06/09

FKLI futures June contract rise marginally 1 point higher to close at 1080 as compare to previous trading session with total 6,358 lots traded in the market. FKLI seems traded sideways throughout entire trading session as regional indices were traded mix direction as market awaiting solid report while worry global economy.

Technically, surprisingly, FKLI manage to breach new high at 1083 levels and hence traded sideways throughout the entire trading session within range from 1075 to 1080 regions. Based on our technical analyst, our opinion suggest that FKLI would traded lower in the coming trading session provided resistance levels at 1081.5 and 1094 were not violated. Traders were advice to hold short position in the coming trading session while be alert around support levels at 1074 and 1065 regions.

FCPO Commentary on 30/06/09

FCPO 3rd month Sept Futures contract fall RM57 lower to close at RM2262 levels as compare to previous trading session with 9,658 lots traded in the market. CPO price was opened lower due to soybean oil and crude oil overnight weak closing but stable latter trading session as electronic trading session stabilizing throughout the trading session.

Technically, CPO price seems manage to break 1st support levels at RM2298 regions and continue traded lower during the trading session. Based on our wave count in the 15 min price chart, we expect CPO price would have a minor rebound in the coming trading session where resistance levels would be expected around RM2283 and RM2307 regions. However, traders were advice to hold short on rebound in the coming trading session while further support levels seen at RM2093 and RM1930 regions.

Oil Trades Little Changed on Outlook for Slow Economic Recovery

June 29 (Bloomberg) -- Crude oil was little changed after falling on speculation demand for energy and fuel may be limited as the global economy makes a slow recovery from the worst recession since World War II.

A report today in the U.S., the world’s largest oil consumer, may show manufacturing in Texas marked two years of contraction this month. Storms over Mexico’s Yucatan Peninsula may strengthen as they drift northwest, the U.S. National Hurricane Center said. The chance of a cyclone developing in the oil-rich gulf is less than 30 percent, the center said.

“We’ve still got some pretty mixed signals in terms of oil’s fundamentals and in terms of the global economic situation,” said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney. “It’s probably going to take some fairly major catalyst to get it out of this range.”

Crude oil for August delivery was at $69.11 a barrel, down seven cents, in after-hours electronic trading on the New York Mercantile Exchange at 7:15 a.m. in Singapore.

The contract fell $1.07, or 1.5 percent, to $69.16 on June 26 after a report showed savings in the U.S. jumped to a 15-year high in May, signaling a slow recovery in household spending. The August contract declined 1.2 percent last week, having reached a seven-month high of $73.90 on June 11.

New York oil futures have gained 55 percent this year, as rising world equity markets and a weaker dollar encouraged investors to buy the commodity as a hedge against inflation and to profit when demand recovered.

Directionless Dollar

The Standard & Poor’s 500 Index fell the past two weeks. The dollar has also been “fairly directionless,” Commodity Warrant’s Hassall said.

“That is really calling into question whether some of these commodities have rallied too fast, too hard,” he said.

Brent crude oil for August settlement fell 5 cents to $68.87 a barrel on London’s ICE Futures Europe exchange today. It fell 1.2 percent on June 26.

While oil prices are “pretty reasonable” another increase in U.S. gasoline stockpiles this week may be enough to prevent any push higher, he said.

U.S. gasoline demand, based on deliveries from refineries and terminals, usually peaks July-August.

Stockpiles rose the past two weeks, gaining 3.87 million barrels to 208.9 million in the week ended June 19, according to Energy Department data. Total fuel consumption fell 5.5 percent to 17.9 million barrels a day the same period, the biggest drop since January.

This week’s gasoline inventory report “could be a pretty critical number,” Hassall said.

Gold Rises to Two-Week High as Record Rates Drive Down Dollar

June 26 (Bloomberg) -- Gold touched a two-week high and marked its first weekly gain since May as the dollar weakened and a benchmark lending rate touched a record low in London, increasing the metal’s appeal as an alternative investment.

The dollar declined as the three-month London interbank offered rate, or Libor, slipped below 0.6 percent for the first time. The dollar-based rate, a benchmark for about $360 trillion in financial products, peaked at 4.82 percent on Oct. 10. On June 24, the Federal Reserve left unchanged its target bank- lending rate at zero percent to 0.25 percent, the lowest ever.

The “Fed’s decision to keep interest rates low for an extended period may give enough fundamental support to keep the metal firm,” Pradeep Unni, a Richcomm Global Services analyst in Dubai, said in a note. The dollar’s weakness provided “fresh momentum” for gold, Unni said.

Gold futures for August delivery rose $1.50, or 0.2 percent, to $941 an ounce on the New York Mercantile Exchange’s Comex division, after earlier touching $949, the highest since June 12. The 0.5 percent weekly gain was the first since May 29. The four-day rally was the longest in five weeks.

The U.S. Dollar Index, a measure of the greenback’s value against six counterparts, fell as much as 1 percent after Libor slid and China’s central bank reiterated its call for a “super sovereign” global reserve currency.

In London, bullion for immediate delivery gained $1.34, or 0.1 percent, to $940.59 an ounce at 8:17 p.m. local time. The metal slipped to $942 an ounce in the afternoon “fixing” in London, the price used by some mining companies to sell their output, from $943 this morning.

Falling Investment

Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, fell 5.5 metric tons to 1,125.74 tons as of yesterday, figures on the company’s Web site showed. That’s the biggest drop in physical supplies since April 17.

With “the slow pace of physical demand, gold is still vulnerable to profit-taking short term, and may look to consolidate in the $910-$950 area before pushing toward $1,000 again,” James Moore, an analyst at TheBullionDesk.com in London, said today in a note. Gold last traded above $1,000 an ounce in February.

To be sure, there are some “perma-bull gold bugs” to whom “the negative real-interest rate environment still presents the perfect golden opportunity,” Jon Nadler, a Kitco Inc. analyst in Montreal, said today in a note.

In another Comex market, silver futures for September delivery climbed 12.4 cents, or 0.9 percent, to $14.156 an ounce. The price declined 0.3 percent for the week, the fourth consecutive drop.

FCPO Commentary on 29/06/09

FCPO 3rd month Sept Futures contract fall back RM19 lower to close at RM2317 levels as compare to previous trading session with 7,698 lots traded in the market. CPO price was mainly traded sideways with wide trading range due to price spike despite crude oil and soybean oil traded higher during intraday session.

Technically, CPO price still fails to breach 50% Fibonacci retrace level and 80 – day exponential moving average at RM2340 regions in the daily price chart. Based on our technical knowledge, we expect CPO price would plunge in the coming trading session provided resistance levels at RM2350 and RM2326 were not violated. Traders were suggest to hold short position in the coming trading session while be cautious around support levels at RM2298 and RM2231 regions.

FKLI Commentary on 29/06/09

FKLI futures June contract rise another 3 points higher to close at 1079 as compare to previous trading session with total 10,006 lots traded in the market. FKLI market seems sideways despite Dow Jones overnight closing and regional indices were closed higher during the trading session.

Technically, FKLI seems traded sideways within range from 1072 to 1078 region while manage to rebound 78.6% Fibonacci retrace level at 1079.5. Based on our technical analyst, our opinion suggest that FKLI would traded lower in the coming trading session where support levels were seen at 1069 and 1062 regions. Traders were suggest to hold short position in the coming trading session provided resistance levels at 1082 and 1094 must not be violated.