Thursday, July 2, 2009

Trader's Comment: Weaker external markets continue to suppress BMD saw prices tumbled sharply lower.

Weaker external markets continue to suppress BMD saw prices tumbled sharply lower. Benchmark Sep09 initially opened unchanged at 2259 but was under pressure all the way though out the morning session and closed below 2200 level before morning break. The further weakening of eCBOT soy oil and Dalian palm coupled with the comments made by Malaysia’s No2 planter who said that June palm oil stock likely to see 1.5 million tones, added more selling pressure to the already weak market. Speculative selling and long liquidation continue to hammer down FCPO prices and ended RM84 lower at 2175 after hitting intra day low at 2169. Market sentiment just weak as some players are concern over rising production and building up inventory.

Breaking News-RTRS-UPDATE 1-INTERVIEW-Malaysia IOI says worst is over for planters

PUTRAJAYA, Malaysia July 2 (Reuters) - IOI Corp , Malaysia's No 2 planter, said on Thursday that the worst was over for the plantation sector as palm oil prices have recovered from last year's slump although M&A activity would be muted.
Earnings of Malaysian palm oil producers plunged in the first quarter as crude palm oil prices more than halved from a year ago.
IOI, valued at $8.37 billion, saw net profit nearly wiped out during January-March due to weak crude palm oil prices and large foreign translation losses on its U.S. dollar borrowings.
Sime Darby , Malaysia's top planter, reported a 85 percent drop in net profit while third-ranked Kuala Lumpur Kepong saw net profit down 52 percent in the same period. "It's quite obvious it will be better. The industry including ourselves expects to see much better fourth quarter (April-June) operating results," IOI Executive Director Lee Yeow Chor told Reuters at the company's headquarters in the administrative capital of Putrajaya.

CPO Tender Summary and Delivery Location as at June 2009

Trader's Highlight

DJI-NEW YORK, July 1 (Reuters) - U.S. stocks rose on Wednesday, the start of the third quarter, as reassuring manufacturing data from China, Europe and the United States reinforced hopes that the world's economy is on the road to recovery.

The Dow Jones industrial average <.DJI> rose 57.06 points, or 0.68 percent, to 8,504.06. The Standard & Poor's 500 Index <.SPX> gained 4.01 points, or 0.44 percent, to 923.33. The Nasdaq Composite Index <.IXIC> shot up 10.68 points, or 0.58
percent, to 1,845.72.

The unemployment rate is expected to have crept up to 9.6 percent -- its highest since June 1983 -- from 9.4 percent in May. The job data is due at 8:30 a.m. (1230 GMT) on Thursday.

NYMEX
-NEW YORK, July 1 (Reuters) - U.S. crude oil futures ended lower on Wednesday, pressured by bigger-than-expected increases in gasoline and distillate inventories last week and as traders shrugged off a larger-than forecast drawdown in crude stocks.

On the New York Mercantile Exchange, August crude settled down 58 cents, or 0.83 percent, at $69.31 a barrel, trading from $68.52 to $71.85. Tuesday's $73.38 peak was the highest intraday front-month price since Oct. 21's $75.69.

CBOT-SOYBEANS - July up 32-1/4 cents to $12.58-1/2. November up 34-1/2 at $10.15-1/2.

Notched a 2-1/2-week top on tight stocks of soy, weak dollar and fund buying.
Talk China buying old-crop and new-crop U.S. soybeans.

CBOT-SOYOIL - July up 0.80 cent per lb at 35.82 cents. Rebounding from Tuesday's sell-off. Supported by gains in soybeans.

FCPO
-JAKARTA, July 1 (Reuters) - Malaysian palm futures bounced back, up 1.3 percent on Wednesday after trading lower in the previous three consecutive trading days, mainly supported by a rise in prices of soybean oil and crude oil, traders said.

The benchmark September palm oil contract on the Bursa Malaysia Derivatives Exchange rose 29 ringgit, or 1.3 percent, to 2,259 ringgit ($642.31) a tonne. Overall traded volume was 12,514 lots at 25 tonnes each.

REGIONAL EQUITIES
-BANGKOK, July 1 (Reuters) - Southeast Asian stock markets
ended mixed on Wednesday, with Indonesia climbing amid rate cut expectations while Singapore and Malaysia recouped early losses, pulled up by banks and developers.

Singapore's index <.FTSTI> ended up 0.8 percent, after sliding earlier, with developer CapitaLand up 1.1 percent, DBS Group Holdings rising 1.5 percent and Oversea-Chinese Banking Corp 1.1 percent higher.

Malaysia <.KLSE> closed 0.4 percent higher at 1079.40, reversing a small loss in early trade. The Kuala Lumpur Composite Index (KLCI) <.KLSE> had ended flat on Tuesday after Malaysia's prime minister unveiled a raft of measures aimed at boosting investment in the slumping economy.

Chris Oh, an analyst at JP Morgan, said the positive steps would take time to make an impact, especially as investors would be wary about how long it would take to implement them.

"We believe the market is ripe for consolidation and would look at lower KLCI entry levels of close to 950-1000 while awaiting the positive feedback loop from the stimulus packages, new policy measures, low interest rates, and stabilisation of the
global economy to feed through earnings momentum," he said.

KLSE Daily: may cover upside gap


Bulls defended well and may likely challenge the upside gap left over since 16/6/2009 at 1083-1086 followed by the recent high at 1095. To the downside, support is pegged at 1070.

FKLI Daily: may challenge 1092


Up-trend remains intact. Market looks may challenge the recent high at 1092 in near term. Downside support is looking at 1070-1068.

FCPO Daily: 2200 mark defended


Market make a defensive recovery to stay above 2200 mark. Thus, market may due to a correction mode in near term. Immediate upside resistance remains at 2294-2296 (unfilled gap left over since 29/6/2009)followed by 2350. While, immediate downside support is pegged at 2220-2200.