Friday, December 4, 2009

Palm Oil May Surge to 3,000 Ringgit a Ton by March, Mistry Says

Dec. 4 (Bloomberg) -- Palm oil prices may soar to 3,000 ringgit ($887) a metric ton by March on potential disruption to world edible oil supplies, said Dorab Mistry, director of Godrej International Ltd.

“We must fear for crude palm oil production in 2010,” he said at an industry conference in Bali, Indonesia today. “It is conceivable that 2010 crude palm oil production will turn out to be less than 2009.”

Mistry previously forecast prices would reach 3,000 ringgit by the end of 2010.

* STORY * VIDEO * Oil Drops Below $76 on Industry Report; Poised for Weekly Fall

Dec. 4 (Bloomberg) -- Crude oil dropped below $76 a barrel, poised for a weekly decline, after falling as a report showed service industries in the U.S. unexpectedly contracted in November, a sign fuel demand may be slow to recover.

Oil declined for a third day after the Institute for Supply Management’s index of non-manufacturing businesses that make up almost 90 percent of the economy narrowed to 48.7 from 50.6 in October, the Tempe, Arizona-based group said yesterday. A Labor Department report today will probably show that the U.S. economy lost jobs in November, according to a Bloomberg News survey.

“The ISM non-manufacturing index reading was weaker than expected and that raised some investor anxiety ahead of the employment report,” said Toby Hassall, a research analyst with CWA Global Markets Pty in Sydney. “Policy makers have indicated they see the recovery as being very uneven, and I expect the unemployment rate to stay elevated for an extended period.”

Crude oil for January delivery dropped as much as 85 cents, or 1.1 percent, to $75.61 a barrel in electronic trading on the New York Mercantile Exchange. It was at $75.68 at 12:16 p.m. Sydney time. Yesterday, the contract fell 14 cents to $76.46. Prices, which are up 70 percent this year, are poised for a 0.5 percent weekly decline.

The Labor Department may say today in a report that U.S. employers dropped 125,000 non-farm workers from their payrolls, according to the median forecast of 81 economists surveyed by Bloomberg News.

“The weaker dollar has been a very supportive element for oil,” Hassall said. “There is nothing to suggest the longer term downward trend in the dollar is about to break.”

Dollar Decline

The euro rose against the dollar and the yen as European Central Bank President Jean-Claude Trichet announced yesterday the first steps toward scaling back emergency lending designed to revive the region’s economy. The greenback traded at $1.5057 per euro at 12:19 p.m. in Sydney, from $1.5053 yesterday.

A weaker dollar increases the appeal of commodities as an alternative investment.

U.S. equities declined, breaking a three-day winning streak for the Standard & Poor’s 500 Index. The S&P 500 fell 0.8 percent in New York yesterday after rising as much as 0.7 percent. Australia’s benchmark S&P/ASX 200 lost 1.2 percent at 12:19 a.m. in Sydney.

Oil declined 2.3 percent on Dec. 2 after the U.S. Energy Department reported crude oil supplies rose 2.09 million barrels to 339.9 million, the highest level since August. Gasoline stockpiles increased 4 million barrels, the report showed.

Brent crude oil for January settlement dropped 64 cents, or 0.8 percent, to $77.72 a barrel on the London-based ICE Futures Europe exchange at 12:19 p.m. in Sydney. Yesterday, the contract rose 48 cents, or 0.6 percent, to $78.36.

Soybeans Rise on Increasing Overseas Demand for U.S. Supplies

Dec. 3 (Bloomberg) -- Soybeans rose the most in two weeks on signs that overseas demand for the U.S. oilseed and animal feed continues to increase.

U.S. exporters sold 722,550 metric tons (26.5 million bushels) in the week ended Nov. 26, up from 359,783 tons a year earlier, the Department of Agriculture said today in a report. Total sales since Sept. 1 are up 58 percent to about 27.8 million tons, including 17 million to China, the biggest consumer. Export shipments of soybean meal, an animal feed, last week were the largest since April 1998, USDA data show.

“It’s solid export demand that is underpinning soybean prices,” said Bill Nelson, a senior economist for Doane Advisory Services Inc. in St. Louis. “USDA is underestimating Chinese demand.”

Soybean futures for January delivery rose 13 cents, or 1.3 percent, to $10.47 a bushel on the Chicago Board of Trade, the biggest gain since Nov. 17. In the previous two days, the most- active contract fell 2.5 percent on speculation export demand may slow from its record pace. Soybeans are up 13 percent since the end of September and touched a five-month high on Dec. 1.

The U.S. soybean crop was valued last year at $27.4 billion, behind corn at $47.4 billion, government figures show.

Yen Gains Against Euro as Stock Declines Spur Demand for Safety

Dec. 4 (Bloomberg) -- The yen rose against the euro, ending three days of losses, as a decline in Asian stocks spurred demand for the relative safety of Japan’s currency.

The yen climbed to 132.69 per euro as of 9:29 a.m. in Tokyo from 132.87 yesterday in New York. Japan’s currency advanced to 88.12 per dollar from 88.26. The dollar traded at $1.5062 per euro from $1.5053.

Thursday, December 3, 2009

FKLI Commentary on 04/12/09

FKLI Nov Futures contract traded 5.5 points lower close at 1267.5 levels as compare to previous trading session to with a total of 4,153 lots traded in the market. FKLI was traded sideways throughout the end of trading sessions despite was opened higher in the morning session due to strong regional indices performance.

Technically, FKLI complete 100% Fibonacci price target at 1275.5 and ended lower previous day resistance levels at 1274.5 while daily chart appeared to trade lower than support trend line and Bollinger middle band. Based on our technical view, FKLI seems fail to penetrate resistance levels at 1277 and 1281 regions while a minor symmetric triangle formed in the 15 min price chart. Our opinion suggests FKLI are likely to trade lower in the coming trading sessions provided resistance levels at 1277 and 1281 were not violated. Traders were advice to hold short position once support level at 1266 and 1254 regions fails to hold against the selling pressure.

FCPO Commentary on 04/12/09

CPO 3rd month Feb futures contract traded RM11 points lower as compare to previous trading sessions to close at RM2478 with a total of 4,212 lots traded in the market. CPO price was mainly traded sideways during trading sessions despite crude oil and soybean oil were traded firm during overnight and electronic trading.

Technically, CPO price manage to rebound 50% as compare to previous day high at RM2510 regions and seems possible to a minor upwards flag formation. Based on our technical view, CPO price was spotted formed at larger size of symmetric triangle in the hourly price chart where resistance levels were seen at RM2492 and RM2500 regions. Based on our opinion, we suggest CPO price would likely to trade sideways until traded price manage to penetrate either support or resistance trend line in the coming trading sessions. Traders were advice to continue hold long position provided support levels at RM2470 and RM2445 regions were not violated in the coming trading sessions.

Oil Trades Below $77 After Falling as U.S. Supplies Increase

Dec. 3 (Bloomberg) -- Crude oil traded below $77 a barrel in New York after a government report showed a gain in U.S. stockpiles last week as consumption declined in the world’s biggest energy consumer.

Oil fell 2.3 percent yesterday as supplies of gasoline climbed 4 million barrels to 214.1 million, the Energy Department said. Prices also declined as the dollar rose against the euro, limiting investors’ need for physical assets such as commodities to hedge against inflation.

“Gasoline was a bit of a concern and the dollar was a little bit firmer, and that has stopped oil from bumping along too much,” Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney, said by telephone. “Energy is not the flavor of the day.”

Crude oil for January delivery rose 20 cents to $76.80 a barrel in electronic trading on the New York Mercantile Exchange at 11:16 a.m. in Sydney. Yesterday, the contract fell $1.77 to settle at $76.60. Prices are up 72 percent this year.

Stockpiles of crude rose 2.09 million barrels to 339.9 million, the highest level since August, the Energy Department said. Inventories were forecast to decline by 400,000 barrels, according to the median of 15 analyst estimates in a Bloomberg News survey.

Total U.S. daily fuel demand averaged 18.5 million barrels in the four weeks ended Nov. 27, down 3.2 percent from a year earlier, the Energy Department report showed yesterday. Consumption slipped by 497,000 barrels a day last week.

Middle East Tension

“We might see a little bit of Middle Eastern tension start to pick up,” Barratt said. “If things in Iran start to heat up a little bit, then we’ll probably get a little bit of a premium start to be built into the market.”

Five British yachtsmen detained by Iran’s navy in the Persian Gulf last week were released yesterday, state-run media reported. Iran’s Revolutionary Guards Corps said questioning of the sailors made it clear they had entered Iranian waters by mistake, the Fars news agency reported.

Iran announced an expansion of its nuclear program in defiance of United Nations demands, a move that the Obama administration said will further isolate the country from the international community.

President Mahmoud Ahmadinejad’s Cabinet ordered the Atomic Energy Organization of Iran to begin building 10 uranium enrichment sites within two months, the Islamic Republic News Agency reported on Nov. 29.

Refinery Rates

U.S. refineries operated at 79.7 percent of capacity, down 0.6 percentage point from the previous week, according to the department’s report. A 0.2 percentage-point gain was forecast.

Oil also dropped after a report showed that output in Russia, the world’s largest producer, remained at a post-Soviet high for a second month in November as OAO Rosneft ramped up the Vankor field in northern Siberia.

Production was unchanged from October at 41.22 million metric tons, or 10.07 million barrels a day, the Energy Ministry’s CDU-TEK unit said in an e-mailed statement yesterday. Output rose 2.9 percent from a year earlier.

Rosneft said last week it plans to raise output at Vankor by as much as 50 percent to an average of 270,000 barrels a day next year. It anticipates peak production of more than 500,000 barrels a day from the field.

Brent crude oil for January settlement fell $1.47, or 1.9 percent, to end the session at $77.88 a barrel on the London- based ICE Futures Europe exchange yesterday.

Yen Weakens on Signs of Economic Recovery, Intervention Concern

Dec. 3 (Bloomberg) -- The yen weakened for a third day against the euro as signs the global economy is recovering damped demand for the relative safety of Japan’s currency.

The yen declined against all of its 16 major counterparts before reports today that economists said will show the decline in European retail sales slowed and U.S. service industries expanded. Japan’s Vice Finance Minister Rintaro Tamaki, who is head of international affairs including currency policy, met with U.S. Treasury officials this week in Washington and they may have discussed the yen’s advance to a 14-year high.

“With the global economy recovering, risk trades will weigh on the funding currencies” such as the yen, said Soichiro Mori, manager of foreign-exchange promotion at FXOnline Japan Co., a margin-trading company. “Higher-yielding currencies will benefit from the liquidity-driven play.”

The yen declined to 132.16 per euro as of 9:18 a.m. in Tokyo from 131.46 yesterday in New York. Japan’s currency fell to 87.66 per dollar from 87.38. It strengthened to 84.83 on Nov. 27, the highest since July 1995. The dollar dropped to $1.5078 versus the euro from $1.5044.

Store revenue in the 16-nation euro region fell 2.4 percent in October following a 3.6 percent drop the previous month, according to a Bloomberg News survey of economists before the European Union’s statistics office releases the data today.

The Institute for Supply Management’s index of non- manufacturing businesses which make up the largest part of the U.S. economy, rose to 51.5 in November from 50.6 in October, according to a separate Bloomberg survey before today’s report.

U.S. Beige Book

The world’s biggest economy expanded or improved “modestly” across the U.S. from October to mid-November as consumer spending rose in a majority of Federal Reserve districts, the central bank said yesterday in its Beige Book.

The Beige Book “provided the dollar with some support as traders priced a bit more Fed tightening in the latter part of 2010,” John Kyriakopoulos, head of currency strategy in Sydney at National Australia Bank Ltd., wrote in a research note today.

Fed funds futures indicated yesterday a 77 percent chance the central bank will raise its target lending rate to at least 0.50 percent by the time of its November 2010 meeting, compared with 60 percent odds a month ago.

U.S. stocks erased earlier losses yesterday following the release of the Beige Book. The Standard & Poor’s 500 Index has jumped more than 60 percent from its 2009 low on March 9 on prospects for a recovery from recession. The Nikkei 225 Stock Average advanced 1.7 percent today, a fourth day of gains.

Tamaki Visit

Japan’s Vice Finance Minister Tamaki met the Treasury officials after the yen reached a 14-year high against the U.S. currency on Nov. 27.

“I can’t imagine that they didn’t bring it up,” though at the same time it’s not “at the front line in terms of top concerns,” said Win Thin, a New York-based currency strategist at Brown Brothers Harriman & Co., referring to intervening in the foreign-exchange market. “The U.S. dollar is in a broad- based swoon but the pace has been deliberate and the rest of asset markets are holding up.”

Japan should ask the U.S. and Europe to take coordinated action to weaken the yen, Financial Services Minister Shizuka Kamei said in an interview in Tokyo yesterday.

“We need international coordination,” said Kamei, whose People’s New Party is a coalition partner to the Democratic Party of Japan. He has urged Finance Minister Hirohisa Fujii to seek international cooperation to halt the yen’s rally.

FKLI Commentary on 03/12/09

FKLI Dec Futures contract traded 4.5 points higher to close at 1273 levels as compare to previous trading session to with a total of 3,971 lots traded in the market. FKLI was mainly traded sideways despite most of the regional indices were traded higher while Dow Jones was closed firm during overnight trading.

Technically, FKLI appear fail to penetrate 61.8% Fibonacci resistance levels at 1274.5 regions while manage to retrace towards 50% from previous day low. Based on our technical view, FKLI seems stay above support trend line while price was back above Bollinger middle band in the daily chart. Our opinion suggests FKLI would certain trading upwards provided manage to penetrate and hold above resistance levels at 1277 and 1281 regions. Traders were advice to only hold long position if resistance levels were violated. Support levels were seen at 1268 and 1258; middle Bollinger band in hourly and daily chart.

FCPO Commentary on 03/12/09

CPO 3rd month Feb futures contract traded RM6 points lower as compare to previous trading sessions to close at RM2489 with a total of 6,971 lots traded in the market. CPO price was traded sideways due to mix reaction on soybean oil and crude oil electronic trading during trading sessions despite both were closed firm during overnight trading.

Technically, CPO price was seen fail to penetrate 78.6% Fibonacci resistance levels at RM2504 regions after 2 attempts to penetrate the resistance levels while manage to retrace 38.1% from previous low at RM2445 regions. Based on our technical view, CPO price seems formed minor descending triangle in the 15 min price chart with nearest support seen at RM2483 regions while down slope resistance trend line. Our opinion suggests CPO price would only continue trade higher once manages to penetrate resistance levels at RM2495 and RM2521 regions. Traders were advice to hold long position once resistances levels were breach convincingly while support levels were seen at RM2477 and RM2445 regions.