Trader's Comment: Palm oil futures slightly rebounded from yesterday’s losses to end off high.

Palm oil futures slightly rebounded from yesterday’s losses to end off high. Benchmark Aug09 hit intra day high of 2559 after opened RM41 higher at 2540, tracking the high prices traded in eCBOT soy oil and Dalian palm during early trading hour. However, it then eased of again until it hit intra day low at 2494 before morning close. Prices began to hover between 2500-2530 level through out the afternoon session until it finally settled RM23 higher at 2522. External markets were mix today as eCBOT soy oil rebounded strongly from its overnight losses while Dalian palm surrendered its earlier gains and ended lower during Asian time trading.

Trader's Comment: Palm oil futures tumbled sharply lower with triple digit losses on weak external market.

Palm oil futures tumbled sharply lower with triple digit losses on weak external market. Benchmark Aug09 initially hit intra day high of 2626 after opened RM7 higher at 2609, following the strong close in overnight NYMEX crude oil. However, lack of follow through buying activities led prices easing off and closed at 2570 before morning break. Spill over from the further weakening of external markets saw Benchmark Aug09 continued to fall for the remaining session. it hit intra day low of 2480 before settled RM103 lower at 2499. eCBOT soy oil drop more than 1% while Dalian palm ended with almost 100 point losses. Asian time NYMEX crude oil also surrendered most of its previous session’s gains at more than 2% lower. Market sentiment had turned weak due to lack of fresh friendly factor. Dorab Mistry’s paper during early of the week was more or less ignored and discounted by players, as players believed that most of his comments had factored in already. Moreover, technically also grossly overbought and needed a good correction.

Breaking News-RTRS-Hungry China keeps US soybean export sales rolling

CHICAGO, May 21 (Reuters) - The surge in U.S. soybean
prices to fresh seven-month highs last week did little to
dampen export demand, with a government report Thursday pegging
sales at a higher-than-expected 1.4 million tonnes.
And despite scattered market talk of a pullback in demand
from China, the world's top importer of soybeans bought about
seven Panamax cargoes of the oilseed last week, including
192,600 tonnes of supplies from last year's harvest.

Breaking News-RTRS-UPDATE 2-Drought-hit Argentine soy crop seen at 32.2 mln T

BUENOS AIRES, May 20 (Reuters) - Argentina's drought-hit soy crop looks set to shrink by 30 percent to 32.2 million tonnes, the smallest in five years, the Buenos Aires Grains Exchange said Wednesday.
The exchange, which has repeatedly cut its forecast for 2008/09 output as the harvest advanced, lowered its previous weekly outlook of 32.8 million tonnes due to poor yields as gathering nears its end.

Trader's Highlight

DJI-NEW YORK, May 21 (Reuters) - U.S. stocks slid in a broad sell-off on Thursday as investors, concerned about the U.S. budget deficit, exited dollar-denominated assets across the board.

Markets came under severe selling pressure as a result of an outlook downgrade for the U.K.'s triple-A credit rating heightened fears that the United States, with its increasing budget deficit and weakened economy, could face a similar fate.

The Dow Jones industrial average <.DJI> dropped 129.91 points, or 1.54 percent, to 8,292.13. The Standard & Poor's 500 Index <.SPX> fell 15.14 points, or 1.68 percent, to 888.33. The Nasdaq Composite Index <.IXIC> lost 32.59 points, or 1.89 percent, to 1,695.25.

NYMEX-NEW YORK, May 21 (Reuters) - U.S. crude oil futures ended with pared losses on Thursday as the dollar shifted lower and as news of a temporary shutdown of the only deepwater oil port in the nation caused some supply jitters.

On the New York Mercantile Exchange, July crude settled down 99 cents, or 1.6 percent, at $61.05 a barrel, trading from $59.92 to $61.87.

CBOT-SOYBEANS - July up 6 cents at $11.75. Support from tight stocks and strong export demand but gains limited by profit-taking, lower stock market and lower crude

CBOT-SOYOIL - July down 0.39 cent at 37.98. Lower crude oil and profit-taking weighing on soyoil futures.

FCPO-KUALA LUMPUR, May 21 (Reuters) - Malaysian palm futures fell 3.96 percent on Thursday after recent strong gains as tight domestic supply fuelled concerns that buyers would eventually switch to rival Indonesia.

The benchmark August contract on Bursa Malaysia's Derivatives Exchange closed 103 ringgit lower at 2,499 Malaysian ringgit ($709.7). Overall volume stood at 22,324 lots of 25 tonnes each.

REGIONAL EQUITIES-BANGKOK, May 21 (Reuters) - Southeast Asian stock markets
mostly fell on Thursday, mirroring weakness around Asia after a downbeat forecast for U.S. economic growth, with big caps like DBS Group, Telekom Malaysia and PTT among the losers.

Singapore's Straits Times Index <.FTSTI> dropped 2.6 percent, ending four days of gains, while Thailand <.SETI> dropped 2.3 percent after a four-day rally and Malaysia <.KLSE> snapped a two-day rise to close down 0.7 percent.

Philippine stocks <.PSI> were flat but Vietnam <.VNI> bucked the trend, rising for a fifth day by 0.5 percent. Indonesia <.JKSE> was closed for market holiday.

DJI Daily: Still in range trading

Market remains in rangy mode. Thus, we maintain immediate downside support at 8000. To the upside, resistance is maintain at 8600-8700.

KLSE Daily: Up-trend remains intact

Up-trend remains intact provided 1000 mark continue to support. Thus, we maintain the upside resistance at 1050. To the downside, support is pegged at 1027-1022 followed by 1017-1012 (gap left over on 19/5/2009).

FKLI Daily: Remains positive tone

Profit taking activities were evident after market hit a fresh new high again. However, the overall immediate daily technical outlook remains positive. As for now, we look for the upside resistance at 1045.5-1050. To the downside, support is at 1022 followed by 1013.1006.5 (gap left over on 19/5/2009).

FCPO Daily: Sinking of FCPO

Market sank drastically with triple digit losses following support at 2515-2500 was failed to defend. We are now changing our view towards sideways to lower in near term market. As for now, upside resistance is at 2650-2665. To the downside, support is pegged at 2450-2400.