Trader's Comment: Palm oil futures extending its losses to close sharply lower

Palm oil futures extending its losses to close sharply lower amid weakening crude oil in Asian time zone. Morning session prices were rather mix to easier, spilled over from yesterday’s weak closing and also overnight weak crude oil prices. Nevetheless, selling pressure emerged in the afternoon session following a negative comment by James Fry during his paper in Bali, palm oil conference. He expecting palm prices to fall below USD400 by next April, also expects crude oil prices to dip further to USD35. Whereas, Dorab Mistry expected prices to hover around 1500 in next 8-10 weeks due to palm output growth seen slowing from December due to change in biological cycle. Selling activities emerged in late trading and slam prices down to 1457 before it settled RM74 lower at 1462. Market sentiment remains weak.

Breaking News-RTRS-INDONESIA LOCAL GOVT TO SHUT DUMAI PORT IN RIAU, SUMATRA FROM DEC. 15 - DEP MAYOR

JAKARTA, Dec 4 (Reuters) - Indonesia's Dumai port in Riau, Sumatra, which handles palm oil, rubber and other goods, may be blocked by the local authorities from Dec. 15, a deputy mayor said on Thursday. (

Breaking News-RTRS-Palm prices seen below $400 by April - Fry

NUSA DUA, Indonesia, Dec 4 (Reuters) - Palm oil prices are expected to fall below $400 a tonne by April next year as crude oil is expected to dip below $35 a barrel, top industry analyst James Fry said on Thursday.

Breaking News-RTRS-INTERVIEW-Indian defaulters ship out palm oil from Indonesia

NUSA DUA, Indonesia Dec 3 (Reuters) - Indian buyers who defaulted on palm oil imports from Indonesia have begun to ship out a portion of the old contracts following protests from producers, an industry official said.
"I have received reports that Indian defaulters have asked for shipments although so far they have not asked for the entire amount," Akmaluddin Hasibuan, chief of Indonesian Palm Oil Producers Association (GAPKI), told Reuters late Tuesday night.
He said the defaulters are willing to pay prices agreed under the old contracts.

Breaking News-RTRS-UPDATE 1-OPEC to cut oil supply at December meeting-Qatar

DUBAI, Dec 3 (Reuters) - OPEC will cut oil output at its next meeting on Dec. 17 in Algeria, Qatar's oil minister said on Wednesday.
"For sure we will cut in Oran (Algeria)," Abdullah al-Attiyah told reporters on the sidelines of a petrochemical conference in Dubai. "I don't know by how much. We will discuss it there."

Breaking News-RTRS-UPDATE 2-China to expand grain reserves, build storage

BEIJING, Dec 3 (Reuters) - China's largest soy producing province, Heilongjiang, has confirmed its part in a central government plan to buy more grains and soybeans for reserves.
The scheme is an effort to shore up prices and protect farmers' incomes, thereby avoiding hardship and unrest among the rural population.

Breaking News-RTRS-Biofuel output seen up on lower feedstock costs-Fry

NUSA DUA, Indonesia, Dec 3 (Reuters) - Global biodiesel output is likely to climb 27 percent to 14 million tonnes in the 2008/09 oil year as producers capitalise on weak raw-material prices and absorb excess inventories, a leading industry analyst said on Wednesday.

Breaking NewsRTRS-INTERVIEW-Malaysia chides HSBC move to curb palm oil

KUALA LUMPUR, Dec 3 (Reuters) - Banking giant HSBC's decision to curb lending to oil palm projects in Malaysia is misguided and will hurt the bank more than it will hurt Malaysia's palm industry, the country's commodities minister said.
"My immediate reaction to that is I think that banks like HSBC should look at individual clients that they are doing business with rather than saying we will cut 30 percent just like that," Plantation Industries and Commodities Minister Peter Chin told Reuters.
Chin said that HSBC Malaysia had told him the bank had 300 forestry clients in the country.
Chin said that Malaysia is expected to export palm oil worth nearly 60 billion ringgit ($16.50 billion) this year against 42 billion last year, but saw a decline in revenues next year.
"2009 will be slightly down, not only because of lower prices, (but) there is some dampening of demand especially in Europe," he said.

Breaking News-RTRS-UPDATE 3-Legg Mason's Miller: "Bottom's been made" in stocks

NEW YORK, Dec 3 (Reuters) - Legg Mason's Bill Miller, a celebrated value investor but whose stock picking is far off the mark this year, said on Wednesday the "bottom has been made" in U.S. equities, and forecast opportunities for strong gains once markets rally.
Miller's comments were given partial credit for Wednesday's 172.60-point rise in the Dow Jones industrial average <.DJI>.
It "looks as if the bottom has been made" in U.S. stocks, he said.

Breaking News-RTRS-BoE seen slashing rates to 2 pct as economy dives

LONDON, Dec 4 (Reuters) - The Bank of England could slash interest rates to their lowest in more than half a century later on Thursday amid mounting evidence the rapidly sinking economy may be heading for a full-blown depression.
A Reuters poll this week reflected that view, with 40 out of 62 economists expecting a full one percentage point cut to 2 percent.
Former BoE policymaker Willem Buiter called this week for the central bank to bring rates down to zero and start pumping cash into the economy to bring it back to life, like Japan did in the 1990s when its economy dived and deflation took hold.
"If zero is the floor, there is no reason not to go there immediately," Buiter wrote in his Financial Times blog.

Breaking News-RTRS-ECB set to cut rates as spotlight falls on forecasts

FRANKFURT, Dec 4 (Reuters) - The European Central Bank is expected to cut interest rates to at least a two year low on Thursday armed with a new set of in-house forecasts likely to confirm that the euro zone economy is in serious trouble.
Two-thirds of analysts in a Reuters poll [ECB/INT] see a 50 basis points cut which would take rates to a 2.75 percent -- a two year low -- but 24 of the 81 economists polled think policymakers will go for a 75, or even 100 basis point cut.

Trader's Highlight

DJI-NEW YORK, Dec 3 (Reuters) - U.S. stocks rose for a second day on Wednesday as investors flocked to shares of Coke and other companies that hold up well in recessions following another round of disappointing economic data and corporate
outlooks.

Before the opening bell, ADP Employer Services said U.S. private-sector employers cut a larger-than-expected 250,000 jobs in November, the most in seven years, two days before the release of the government's unemployment figures.

The Dow Jones industrial average <.DJI> jumped 172.60 points, or 2.05 percent, to end at 8,591.69. The Standard & Poor's 500 Index <.SPX> rose 21.93 points, or 2.58 percent, to 870.74. The Nasdaq Composite Index <.IXIC> shot up 42.58 points, or 2.94 percent, to 1,492.38.

Shortly before the closing bell, the Wall Street Journal reported that the U.S Treasury Department is considering a plan to stem the fall of home prices by lowering mortgage rates through Fannie Mae and Freddie Mac , which helped fuel the late rally


NYMEX-NEW YORK, Dec 3 (Reuters) - U.S. crude oil futures settled lower for the fourth day in a row on Wednesday as demand worries overshadowed data showing that crude and refined product stocks fell unexpectedly last week. Prices fell despite fresh signals from OPEC that the group will move to cut production again at its Dec. 17 meeting.

On the New York Mercantile Exchange, January crude settled down 17 cents, or 0.36 percent, at $46.79 a barrel, the lowest since the Feb. 9, 2005 setttlement at $45.46. It traded from $46.26, the lowest since $46.20 was hit on May 20, 2005,
to $48.10.

CBOT-SOYBEANS - January up 3 cents at $8.30 per bushel. Firm cash, slow farmer selling and commercial bull-spreading supporting gains in spot month. Crop-friendly
weather in South America, especially in Argentina, continue to hang over the market.

CBOT-SOYOIL - December down 0.14 cent at 30.28 cents per lb, January down 0.19 at 30.58. Choppy two-sided day with firm soy countered by late
weakness in crude oil.

FCPO-KUALA LUMPUR, Dec 3 (Reuters) - Malaysian palm futures ended lower by over 4 percent on Wednesday in quiet trade with buyers largely sidelined.

The benchmark February palm oil contract on the Bursa Malaysia's Derivatives Exchange was down 4.18 percent, or 67 ringgit, at 1,536 ringgit per tonne. It reached a high of 1,590 and a low of 1,527 ringgit in the session.

Other traded months ranged from 51 to 72 ringgit lower <0#KPO:>. Overall trade stood at 6,243 lots of 25 tonnes each.

REGIONAL EQUITIES-BANGKOK, Dec 3 (Reuters) - Most Southeast Asian stock markets
rallied on Wednesday, reversing early losses, as anti-government protesters lifted their crippling blockade of Thailand's main airport and Wall Street gains spurred regional investors to look for bargains.

Thailand's benchmark index <.SETI> gained 1.45 percent, ending two days of falls, with Philippine shares <.PSI> up 1.35 percent and Malaysia <.KLSE> rising 0.2 percent.

Indonesian stocks <.JKSE> also snapped a two-day losing streak, climbing 0.1 percent, while Singaporean shares <.FTSTI> ended 0.08 percent higher. Vietnam <.VNI>, however, bucked the trend, falling 0.4 percent.

DJI Daily: stuck

Nothing much changes on the immediate daily technical landscape despite prices up for two straight days. Market remains stuck in bearish territory. Thus, resistance and support maintain at 8831-8827 and 8048-8071 level respectively.

FKLI Daily: struggling

Market continue to struggle to move in tight range trading. We maintain the support and resistance at 827.5 and 864.5-865 level respectively.

KLSE Daily: remains sideways to lower

Market continue to move sideways to lower. We continue to look at the immediate support at 838-837 followed by 826. For upside, immediate resistance is 853-857.

FCPO Daily: looks tiredness to defend

Market looks tiredness to defend following prices continue to ease off. We continue to look for the support at 1500-1490 followed by 1440-1428. For upside, immediate resistance is at 1635-1640 followed by 1666.

Trader's Comment: CPO futures tumbled sharply despite Asian time crude oil stood firm

CPO futures tumbled sharply despite Asian time crude oil stood firm after sliding more than 4% to settle below $47 overnight. Together with lower overnight CBOT soy complex, Benchmark Feb09 merely hit the intra day high at 1590 after opened RM15 lower at 1588, thereafter fell all the way down till the end of morning session. Some support on CPO market appeared in the early part of second session saw prices to hover between 1560-1575. However, it failed to sustain due to lack of follow through buying, prompting intra day long liquidation activities and sent prices to tumble in the late trading. It hit intra day low of 1527 before it settled RM67 lower at 1536. Statement made by Dorab Mistry, a leading industry analyst, which stated that India may impose tax on palm oil next month had also provided selling pressure on market.