Trader's Comment: CPO futures extend yesterday’s losses and drop to two-years low

CPO futures extend yesterday’s losses and drop to two-years low after crude oil plunged to new 13 months low. The released of bad US economic news had heightened recession fears despite all the government efforts to unlock credit markets. The growing concern on economic slowdown has also made global demand more sluggish. New benchmark Jan 09 initially opened RM 93 lower at 1655. Later in the afternoon, it was slammed down to break below the 1600 level, and hit intra-day low of 1593, after crude oil price fell further down to a low of $71.21 during Asian time trading. Traders have been following closely to crude oil prices because it has been leading the price of other commodities especially palm oil which has been falling so severe. News that Indonesia government proposed to scrap the palm oil export tax when crude palm oil prices hit $650-$750 a tonne, also had added onto the already weak sentiment. Nevertheless, CPO prices manage to recover a little from the fall after some short covering activities take place. Benchmark Jan 09 rebounded from the low of 1593 and closed at 1652. Daily volume increased slightly, with 19,093 contracts changed hands.

FCPO Daily: at two-years low

Market extended losses to three-years low. We currently look for the support at 1500. Upside resistance is at 1667-1734 (gap left over this morning).

Breaking News-RTRS-Indonesia says plans to cut rubber output by 30pct

JAKARTA, Oct 16 (Reuters) - Indonesia plans to cut production of natural rubber output by 30 percent this year to lift slumping prices, Agriculture Minister Anton Apriyantono said on Thursday.
The ministry also proposed scrapping palm oil tax when crude palm oil prices hit $650-$750 a tonne, Apriyantono said.

FKLI Daily: struggle to survive at 900 mark

FKLI is struggling above 900 mark after recent low at 928.5 was penetrated. Next support after 900 mark is at 870. For upside, resistance is at 923-944 (gap left over this morning).

KLSE Daily: physiological support at 900 mark

Market momentum dampened further following recent low at 926 level was violated. We now look for the 900 mark physiological support. While, upside resistance is at 932-946 (gap left over this morning).

Breaking News

RTRS-US SEC adopts interim final rule requiring big investors to disclose short positions.
RTRS-US SEC rule extends temporary short sale disclosure order through Aug 1, 2009

Trader's Highlight

DJI-NEW YORK, Oct 15 (Reuters) - Wall Street had its worst day since the 1987 stock market crash on Wednesday, as bleak economic data fed worries that all the efforts to unlock credit markets may not stave off a severe recession.

Federal Reserve Chairman Ben Bernanke added to those concerns when he said the economy faced a "significant threat" from paralyzed credit markets.

Dismal monthly U.S. retail sales set the tone for the session, dropping the most in more than three years, while a measure of New York state manufacturing hit its lowest level since the index started in 2001.

The Dow Jones industrial average <.DJI> slid 733.08 points, or 7.87 percent, to 8,577.91, while the Standard & Poor's 500 Index <.SPX> tumbled 90.17 points, or 9.03 percent, to 907.84.

The Nasdaq Composite Index <.IXIC> sank 150.68 points, or 8.47 percent, to 1,628.33.

NYMEX-NEW YORK, Oct 15 (Reuters) - U.S. crude futures deepened losses in post-settlement trading on Wednesday, extending the decline to 50 percent from the July record peak, as fears of a recession sparked more demand worries and fueled a sell-off in commodities and equities.

On the New York Mercantile Exchange, November crude traded as low as $73.55 a barrel, down $5.08, or 6.46 percent, the lowest since $73.48 was struck on Sept. 4, 2007.It earlier settled down $4.09, or 5.2 percent, at $74.54. It posted the day's high at $79.17.

CBOT-SOYBEANS - November down 38 cents at $8.58 per bushel,January down 38-3/4 at $8.72-1/2.

Spot price fell to a 13-1/2 month low as euphoria over government steps to rescue the banking industry replaced by recession concerns. Weak crude oil adds pressure.

CBOT-SOYOIL - December down 2.47 cents at 35.53 per lb.Following soybeans and crude oil lower. Losing ground to soymeal on meal/oil spreads.

FCPO-KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives
exchange ended 5.8% lower Wednesday on weak demand in the cash market, lower exports and spillover weakness from soyoil and crude oil.

The benchmark December contract on Bursa Malaysia Derivatives ended MYR107 lower at MYR1,743 a metric ton, the lowest closing price for a third-month contract in nearly two years.

REGIONAL EQUITIES-SINGAPORE, Oct 15 (Reuters) - Southeast Asian markets retreated from a two-day rally on concerns over company earnings and recession fears, while falling crude prices pushed energy-related stocks lower.

Renewed risk aversion surfaced around the world as investors worry that the global economy will not escape even after bank bailouts.

Malaysia <.KLSE> also lost 1.7 percent, while Indonesia<.JKSE> gave up 2.3 percent with losses led by banks. The Philippine index <.PSI> also fell 1.6 percent, but Vietnam <.VNI>bucked the trend to add 2 percent.

Singapore <.FTSTI> led fallers, falling 3.2 percent on banks and commodities, while Thailand <.SETI> slid 3.9 percent, further weighed by a border dispute with neighbouring Cambodia.

DJI Daily: BLACK Wednesday for DJI

DJI had its worst day since 1987. We continue to look for the support at 8462 followed by 7882. Upside resistance is at 9628 followed by 9794 level.