Trader's Comment: Palm oil futures bounced back from yesterday’s losses on weather concern.

Palm oil futures bounced back from yesterday’s losses on weather concern. Benchmark July09 initially opened RM20 higher at 2680, tracking the early gains in Dalian palm. Traders had began to worry on supply constraints again after the release of news that palm oil production will continue to struggle in the next few months and may not even hit strong double digit peaks this years with the current hot and dry weather hurts yields. The subsequent rose of Dalian palm and eCBOT soy oil during Asian time trading had further enhanced some buying support in CPO market. Benchmark July09 finally settled RM65 higher at 2725 after it hit intra day high of 2736 in late trading.

DJN-Indonesia may impose an export tax of 2.5% on crude palm

JAKARTA (Dow Jones)--Indonesia may impose an export tax of 2.5% on crude palm
oil in June, versus a nil tax in May, the country's trade minister said Tuesday.

"If global CPO prices in the April 26-May 25 period average more than $700 a
metric ton (the trigger price for the imposition of an export tax on CPO), then
there will be a 2.5% export tax in June," Mari Pangestu said.

Breaking News-RTRS-Dry weather hurting Malaysian palm output -planters

KUALA LUMPUR, May 12 (Reuters) - Palm oil output in Malaysia will struggle to rise in the next few months and may not even hit strong double digit peaks this year as the current hot and dry weather hurts yields, plantation officials said on Tuesday.

Trader's Comment: Buying on rumors and selling on facts led palm oil futures to surrender its earlier gains

Buying on rumors and selling on facts led palm oil futures to surrender its earlier gains and ended lower despite good news on stock and export data. Initially traders had started to speculate on bullish end-April palm stock and also betting on strong export figures since early trading. This sent Benchmark July09 to climb steadily through out the morning session and hit intra day high of 2745 before it closed at 2743 by midday. The data released by MPOB just after morning closed showed that end-April palm stock had fallen by 5.37% to 1.29 million tones, which is the lowest level since June 2007. However, the opening of second session had seen more of profit taking activities to emerge as market now began to sell on news after their earlier buying on rumors. Benchmark July09 slid to intra day low of 2651 and settled RM25 lower at 2660. The strong export data released by both private cargo surveyors failed to boost buying activities. Furthermore, the weak external market had provided more excuse for players to book profit. Both eCBOT soy oil and Dalian palm fell more than 1% lower during Asian time trading.

Breaking News-RTRS -China soy buyers await US report, weak soymeal weighs

SINGAPORE, May 11 (Reuters) - China's soybean importers stayed on the sidelines on Monday, awaiting a key U.S. government report on global stocks of the oilseed as weakening domestic soymeal prices threatened to further squeeze crushing margins.
Traders said business was dull as buyers wanted to see the price movement on the Chicago Board of Trade after the U.S. Department of Agriculture unveils demand and supply estimates on Tuesday.

Trader's Highlight

DJI-NEW YORK, May 11 (Reuters) - U.S. stocks fell on Monday as investors booked profits in financials after a two-month run-up and news of several banks' share offerings heightened worries about their dilutive impact on current shareholders.

The Dow Jones industrial average <.DJI> shed 155.88 points, or 1.82 percent, to 8,418.77. The Standard & Poor's 500 Index <.SPX> declined 19.99 points, or 2.15 percent, to 909.24. The Nasdaq Composite Index <.IXIC> dipped 7.76 points, or 0.45 percent, to 1,731.24.

NYMEX-NEW YORK, May 11 (Reuters) - U.S. crude futures ended lower Monday, as players booked profits after prices hit a near six-month high on Friday.

On the New York Mercantile Exchange, June crude settled down 13 cents, or 0.22 percent, at $58.50 a barrel, trading $56.78 to $58.63. It settled Friday at $58.63, the highest close since Nov. 11, and hit a high of $58.75, the highest intraday price since $58.98 was struck on Nov. 17.

CBOT-SOYBEANS - May down 4 cents at $11.30 a bushel, July up 4-1/2 cents at $11.16.

Profit-taking after last week's rally to seven-month highs amid lower crude oil and equity markets but soy began moving up when crude started to recover from the day's lows. Tight soy stocks boosted all but spot May, which is in delivery, higher. Traders watching Chinese demand for soybeans

Trade expecting USDA late on Monday to peg U.S. soybean seedings at 15 to 20 percent, below the five-year average of 25 percent.

CBOT-SOYOIL - May down 0.02 cent at 39.28 cents a lb, July down 0.03 cent at 39.58 cents.

Spillover pressure from weak crude oil but market ended above day's lows when crude oil began moving up from the session lows.

FCPO-KUALA LUMPUR, May 11 (Reuters) - Malaysian palm futures dipped 0.9 percent on Monday, erasing gains made earlier in the day as investors booked profits on confirmation that palm stocks last month fell below 1.3 million tonnes.

The benchmark July contract settled down 25 ringgit at 2,660 ringgit ($757.8) per tonne after going as high as 2,745 ringgit per tonne in the morning session. Overall volume doubled to 20,202 lots of 25 tonnes each.

REGIONAL EQUITIES-BANGKOK, May 11 (Reuters) - Major Southeast Asian stock markets lost early gains on Monday, with selling in bank shares and big caps pulling Singapore down for a second day and Indonesia falling after losses in recent gainers such as Astra International.

Singapore's index <.FTSTI> fell 3.2 percent, after inching down 0.15 percent on Friday, as investors unloaded more banking shares and other big caps.

Top lender DBS Group dropped 5.6 percent, Oversea Chinese Banking Corp lost 5.7 percent and United Overseas Bank slid 5 percent. Singapore Telecoms fell 4.9 percent, after losing 0.7 percent on Friday.

DJI Daily: remains Sideway

Market was hovering at sideways. Thus, we maintain the resistance at 8600-8700 followed by 9000. Downside support is pegged at 8000 level followed by 7700.

KLSE Daily: Facing tough resistance

Market looks facing tough resistance at 1037-1040. To the downside, support is stood at 1014-1000.

FKLI Daily: Upswing mode may slow down

Market ended at day low after failed to sustain at 1030 level has slowing down the market upside momentum. Bull looks may want to take a breathe after the recent sharp rallied. Thus, market may consolidate in near term with upside resistance is stood at 1038-1040. To the downside, support remains at 998-993.5 (gap left over on 4/5/2009).

FCPO Daily: in Consolidation phase

Market was entering to a consolidation phase as prices moving in range trading. We are now looking for the immediate upside resistance at 2730-2745 followed by 2798.To the downside, immediate support is pegged at 2650 followed by 2620-2600.