Tuesday, October 21, 2008

FCPO Daily: range trading extended


Market extended its range trading after failed to cover upside gap left over at 1727-1734. Support and resistance remains at 1593 and 1727-1734 (gap left over since 15 Oct, 2008)level respectively.

Trader's Comment: CPO futures ended lower after trading in a rather mix market sentiment

CPO futures ended lower after trading in a rather mix market sentiment. Earlier Benchmark Jan09 open RM18 higher at 1695 and climbed to hit intra day high of 1714 following a strong overnight closed at CBOT soy complex and higher NYMEX crude oil. It then eased off due to lack of follow through buying support and closed at 1685 by mid day. A mix of several supportive and negative news has influenced CPO prices today. First is the Malaysia government considering removing windfall tax after CPO prices declined sharply since the tax was imposed, but then Malaysia postponed a special meeting to discuss on measures to boost palm oil prices, this made traders a bit disappointed as they are waiting for some good news from it. During afternoon session, a leading analyst James Fry commented that palm oil might drop to RM1200 if Brent crude falls to $55. Meanwhile Iran’s oil minister said OPEC might cut oil output by 2-2.5m barrels per day. In the later afternoon session, CPO encounters some long liquidation activities, coupled with easier e-CBOT. Benchmark Jan09 fall to the day low of 1639 before it settled at 1652. Daily volume remains good, with 11,435 contracts changed hands.

FKLI Daily: off the low


Market off low to end mix. Correction phase likely to extend in near term. We continue to look for the immediate downside support at 888. For upside, resistance is at 931-944 (gap left over since 15 Oct, 2008).

KLSE Daily: stuck in range


KLSE stuck in tight range between 914 to 920 level. Correction phase looks may continue in near term between 888 to 930.

Breaking News-RTRS-OPEC may cut oil output by 2- 2.5 million barrels per day-Iran

TEHRAN, Oct 21 (Reuters) - Iran's oil minister said on Tuesday the drop in demand could push OPEC to cut output by 2- 2.5 million barrels per day and said the "era of cheap oil is finished."
Gholamhossein Nozari told reporters a drop in demand "can push OPEC to cut the current production by 2-2.5 million barrels per day." Iran's OPEC governor, Mohammad Ali Khatibi, cited different views in OPEC on the cut needed, ranging from 1-3 million bpd.

Breaking News-RTRS- MALAYSIAN PALM OIL MAY DROP TO 1,200 RGT IF BRENT CRUDE FALLS TO $55 - ANALYST FRY

KUALA LUMPUR, Oct 21 - Malaysia's palm oil output is likely to grow at a slower rate over the next six months with the current slowdown gaining pace, leading industry analyst James Fry said on Tuesday.
Palm oil prices have fall 60 percent from their March peak of 4,486 ringgit on bumper crops, slowing demand and fears financial turmoil will lead to a long global recession.

Breaking News-RTRS-Malaysia cancels meeting on palm industry measures

KUALA LUMPUR, Oct 21 (Reuters) - Malaysia cancelled a special meeting on boosting palm oil prices scheduled for Tuesday as Prime Minister Abdullah Ahmad Badawi was unable to chair the meeting, an official from the country's commodities ministry said.

Breaking News-RTRS-UPDATE 2-France to lend 10.5 bln euros to top six banks

PARIS, Oct 20 (Reuters) - The French state will lend 10.5 billion euros ($14.12 billion) to the country's top six banks before year-end to prop up their capital reserves, Economy Minister Christine Lagarde said on Monday.
President Nicolas Sarkozy last week said the government had earmarked 360 billion euros as part of an international effort to help banks survive the worst financial crisis since the Great Depression 80 years ago.

Breaking News-RTRS--UPDATE 1-China intervenes to shore up falling crop prices

BEIJING, Oct 20 (Reuters) - China will purchase grains for reserves at prices above current market levels, set up national soybean reserves and buy grains, rapeseed and cotton, in order to help shore up incomes of farmers whose commodity prices are falling sharply.
The moves are in line with a pledge by top policy makers this month to increase rural incomes. They also serve to put a floor under softening crop prices, so that discouraged farmers continue to plant crops next year.

Breaking News-RTRS-Malaysia may scrap palm oil windfall tax - paper

KUALA LUMPUR, Oct 21 (Reuters) - Malaysia's government is considering removing a windfall tax on crude palm oil (CPO), the country's commodities minister was quoted as saying on Tuesday.
"CPO prices have been declining recently ... As such there is no need to implement the windfall tax," Plantation Industries and Commodities Minister Peter Chin told a conference on Monday, the Star newspaper reported.
The threshold for the windfall tax is 2,000 ringgit ($568.2) per tonneand CPO prices traded at 1,718 ringgit a tonne at the close of Malaysian trade on Monday.

Trader's Highlight

DJI-NEW YORK, Oct 20 (Reuters) -U.S. stocks rallied on Monday after the Federal Reserve's chairman backed more government spending to help the economy and credit market conditions showed further signs of improvement.
But the advance of over 4 percent in both the Dow and S&P came on the thinnest daily volume in nearly a month, signaling investors remain skittish about diving back into stocks after weeks of punishing volatility.
The Dow Jones industrial average <.DJI> jumped 413.21 points, or 4.67 percent, to 9,265.43, while the Standard & Poor's 500 Index <.SPX> climbed 44.85 points, or 4.77 percent, to 985.40. The Nasdaq Composite Index <.IXIC> shot up 58.74 points, or 3.43 percent, at 1,770.03.

NYMEX
-NEW YORK, Oct 20 (Reuters) - U.S. crude futures ended more than $2 higher on Monday, with expectations OPEC will cut output at its Friday meeting.

On the New York Mercantile Exchange, crude settled up $2.40, or 3.34 percent, at $74.25 a barrel, trading from $71.77 to $76.12. The contract expires on Tuesday.

CBOT-SOYBEANS
- November up 35 cents at $9.29 per bushel; January up 34 at $9.40-3/4.

Led by gains in crude oil and U.S. financial markets, plus news that China was setting up a national soybean reserve. Added support from an expected slowdown in U.S. harvest progress due to wet and cool weather.

CBOT-SOYOIL
- December up 2.11 cents at 37.61 cents per lb. Gains in soybeans and crude oil lend support; China's Dalian soyoil market sharply higher overnight.

FCPO-KUALA LUMPUR, Oct 20 (Reuters) - Asian vegetable oil markets gained on Monday as investors took cues from higher crude oil prices while governments and commodity cartels looked towards stabilising global markets.

Malaysian palm soared 2.6 percent while some Dalian soyoil contracts <0#DBY:> hit limit up and Chicago soyoil <0#BO:> jumped 3.8 percent during Asian hours -- recovering from losses last week after fears of a recession sparked a sell-off.

REGIONAL EQUITIES-SINGAPORE, Oct 20 (Reuters) - Most Southeast Asian stock markets rose on Monday on hopes that frozen credit markets are slowly thawing, and as investors picked up battered blue chips

Singapore <.FTSTI> led gains, rising 3.2 percent aided by property stocks, Indonesia <.JKSE> gained 2 percent on telcos, while the Thai index <.SETI> was 0.9 percent higher in late trade on energy and banks.

Malaysia <.KLSE> edged 0.5 percent higher, but the Philippine index <.PSI> gave up 1.7 percent and Vietnamese shares <.VNI> declined 3.1 percent on worries over bleaker economic conditions.

DJI Daily: holding ground


DJI manage to hold ground and rebound with triple digit gains. Market looks may due for short term correction. Thus, we now look for the support at 8718. Upside resistance is at 9427-9448 followed by 9628 level.