Trader's Comment: CPO futures rallied strongly extending its gain for the 3rd consecutive days

CPO futures rallied strongly extending its gain for the 3rd consecutive days. Benchmark Mar09 immediately hit the morning high of 1661 after opened RM35 higher at 1625 following a higher Asian time crude oil in the early trade continuing from its overnight gains. It then began to ease off after some profit taking activities took place. Benchmark Mar09 turned lower and hit 1634 in the early part of second session. Nevertheless, the “bull” gained back its strength again and sent CPO prices to bounce back and rallied higher without looking back. It finally settled at the intra day high of 1671. Traders were also speculating on the exports data which is due to be released tomorrow, expecting some strong figure from it.

Trader's Highlight

DJI- NEW YORK, Dec 29 - Violence in the Middle East drove up the price of oil on Monday on worries about threats to crude supplies and fueled a bid for safe-haven government debt.

U.S. stocks fell as Kuwait's decision to scrap a $17.4 billion joint venture with Dow Chemical highlighted fears about the global economy, even as the higher oil prices drove up energy shares.

The Dow Jones industrial average fell 31.62 points, or 0.37 percent, at 8,483.93. The Standard & Poor's 500 Index lost 3.38 points, or 0.39 percent, at 869.42. The Nasdaq Composite Index declined 19.92 points, or 1.30 percent, at 1,510.32.

NYMEX- NEW YORK, Dec 29 - U.S. crude oil futures rose amid volatile trading on Monday, lifted by fighting in Gaza, a weaker dollar, China's intent to add to its strategic petroleum reserve and bargain hunting, sources said.

On the New York Mercantile Exchange, February crude rose $2.31, or 6.13 percent, to settle at $40.02 a barrel, trading from $37.53 to $42.20.

CBOT - SOYBEANS - January down 13-1/4 cents at $9.38-1/2 bushel, March off 11 cents at $9.45-1/2 a bushel.

Falls as traders lock in profits following rally to near 3-month high.

SOYOIL - January off 0.61 cent at 32.21 cents a pound, March down 0.59 cent at 32.53 cents a pound.

Weakened by downturn in soybean futures.

FCPO - KUALA LUMPUR, Dec 26 - Malaysian crude palm oil futures finished 1.99 percent higher on Friday supported by strong exports and gains in crude oil prices.

Exports of Malaysian palm oil products for Dec. 1-25 rose 24 percent to 1,345,325 tonnes from 1,087,865 tonnes shipped between Nov. 1 and 25, cargo surveyor Intertek Testing Services said on Friday.

The benchmark March 2009 contract on Bursa Malaysia's Derivatives Exchange ended up 31 ringgit at 1,590 ringgit ($456.9) per tonne. Gains in other traded months ranged between 20 ringgit and 35 ringgit.

REGIONAL EQUITIES - BANGKOK, Dec 29 - Singapore shares hit a one-week high on Monday, pushed up by financials and property shares such as DBS and Capitaland, while Thai stocks reversed losses and ended higher for a third day despite renewed political turmoil.

Singapore's Straits Times Index rose 3.2 percent to close at its highest level since Dec. 22, while the main Thai index inched up 0.02 percent, building on a 1.7 percent gain over the past two days.

Trader's Comment: Palm oil futures extended yesterday’s gain on strong export figures.

Palm oil futures extended yesterday’s gain on strong export figures. Benchmark Mar09 opened RM3 higher at 1562 following overnight CBOT soy complex settled slightly higher coupled with the rebound of Asian time crude oil in the early trade. It then immediately surged to the morning high of 1586 before some profit taking activities emerged and sent prices to ease off a little to 1571 by midday. The release of 1-25 Dec export data by both private cargo surveyors had provided a firm support on CPO prices. ITS and SGS posted an increase of 23.7% and 23.5% respectively. Benchmark Mar09 began to bounce back after second session resumed trading and continued to rally higher to intra day high of 1596 before it finally settled RM31 higher at 1590. Trading remained quiet ahead of long weekend, as market will be closed on Monday for Awal Muharam.

Breaking News-RTRS-Some Argentine farmers relaunch anti-government protests.

BUENOS AIRES, Dec 23 (Reuters) - A group of Argentine farmers sporadically blocked a rural highway on Tuesday in protest against government farm policy, returning to methods used during a four-month-long conflict earlier this year.
The protest took place a day after President Cristina Fernandez announced a series of measures benefiting the sector, which did not include a highly anticipated reduction in export taxes on the country's top crop, soy.

Breaking News-RTRS--Indonesia keeps January palm oil export tax

JAKARTA, Dec 25 (Reuters) - Indonesia is maintaining its zero
percent palm oil export tax in January, while it will raise crude
palm oil base export price to $418 a tonne from $415 a tonne in
December, the trade ministry said late on Wednesday.
The moves are effective from Jan 1 to end of January.
The new base price is far below the minimum reference price
for palm oil export tax, which has been raised to $700 a tonne
from $550.

Trader's Highlight

DJI-NEW YORK, Dec 24 (Reuters) - One final hurrah, or gasp given the grim global economic conditions, pushed U.S. stocks to a positive close before the Christmas break on Wednesday, but other markets fell, with crude oil slumping 9 percent on the economic outlook.

Stocks in Europe and Asia fell in thin trading volumes, led down by energy pharmaceutical and automotive shares. European and U.S. stock markets closed early.

U.S. stock markets closed at 1 p.m. (1800 GMT). The Dow Jones industrial average <.DJI> gained 48.91 points, or 0.58 percent, to 8,468.40. The Standard & Poor's 500
Index <.SPX> rose 4.91 points, or 0.57 percent, to 868.07. The Nasdaq Composite Index <.IXIC> edged higher, up 3.36 points, or 0.22 percent, to 1,524.90.

NYMEX-NEW YORK, Dec 24 (Reuters) - U.S. crude oil futures fell 9.31 percent on Wednesday in a shortened session as the dreary economy picture offset a government report showing an unexpected drop in crude oil inventories last week.

On the New York Mercantile Exchange, February crude fell $3.63, or 9.31 percent, to settle at $35.35 a barrel, trading from $35.13, a contract low, to $39.69.

CBOT-SOYBEANS - January up 14-3/4 cents at $9.15-3/4 per bushel; March up 14 at $9.19.

CBOT-SOYOIL - January up 0.10 cent per lb at 31.31 cents. Choppy, range-bound session. Caught between firmer soybeans market and weaker crude oil.

FCPO-KUALA LUMPUR, Dec 24 (Reuters) - Malaysian crude palm oil futures ended 1.9 percent higher on Wednesday as traders closed their positions ahead of the Christmas holiday.

The benchmark March 2009 on Bursa Malaysia's Derivatives Exchange closed 29 ringgit higher at 1,559 ringgit ($448.9) per tonne. Gains in other traded months <0#KPO:> ranged between 22 ringgit and 30 ringgit. Overall trade dropped to 3,573 lots of 25 tonnes each from the usual 5,000 lots.

REGIONAL EQUITIES-Malaysian shares <.KLSE> extended their three-day falling streak to end 0.18 percent at an one-week closing low, weighed down by a 0.85 percent fall in Bumiputra Commerce Holdings .

Elsewhere in the region, Indonesia stocks <.JKSE> eased 0.53 percent, while the Philippine index <.PSI> climbed 0.57 percent and Vietnam <.VNI> inched up 0.04 percent, recovering from a 2 percent fall on Tuesday. The Straits Time index <.FTSTI> ended 0.72 percent higher, rebounding after three straight days of losses.

DJI Daily: not much of Christmas cheer

Market stayed firm with bias sideways to downside potential. We continue to look for the support at 8372-8347 followed by 8118-8140. while, upside resistance is at 8600-8680 level.

KLSE Daily: remains sideways to bias little upside potential

Market maintain its sideways to bias little upside potential posture despite it close lower before a Christmas break. As for now, we continue to look for the resistance at 873-874 followed by 880. Immediate downside support is pegged at 862 followed by 858-853.

FKLI Daily: in range trading

Market took a little breathe ahead of Christmas holiday as prices stuck in range trading. We continue look for the support at 863.5-862.5 followed by 853.5-850. For upside, resistance is at 876.5-879 followed by 890.

FCPO Daily: 1500 mark stay firm

Market remains firm above 1500 mark in a dull trading day. Looks 1500-1600 range likely to continue in near term. Upside resistance maintain at 1596-1600. Downside support is pegged at 1509-1487

Trader's Comment: CPO futures surged higher in late trading amid market talk on good export data.

CPO futures surged higher in late trading amid market talk on good export data. Benchmark Mar09 initially opened RM9 higher at 1539 tracking some slight rebound of Asian time crude oil in the early trade after it fell overnight. It hit the morning high of 1561 but was dragged down again due to lack of follow through buying activities and thereafter trading in a range between 1555-1535 through out the morning session. Nevertheless, market sentiment slightly improved after second session resume trading as Benchmark Mar09 was well supported above 1545 level. It started to climb slowly in the last hour of trading to hit intra day high of 1564 before it finally settled RM29 higher at 1559. Rumors that 1-25 Dec export figures, which are due to release tomorrow, may achieve 1.35 million tonnes had also provided some supportive sentiment in the market.

Breaking News-RTRS-China quarantine warns on US soybean import quality

BEIJING, Dec 23 (Reuters) - China's quarantine bureau has warned the United States over the quality of imported soybeans after finding traces of harmful pesticides in one U.S. soy cargo, the bureau said in a statement on Tuesday.
The warning comes as China's government faces calls for import curbs because state purchases have pushed up prices and cheap imports have flooded the domestic market.

Trader's Highlight

DJI-NEW YORK, Dec 23 (Reuters) - U.S. stocks fell in thin trading on Tuesday on further deterioration in the housing market, while worry over weak consumer spending hurt retailers in the final stretch of the Christmas shopping season.

The Dow Jones industrial average <.DJI> lost 100.28 points, or 1.18 percent, to 8,419.49. The Standard & Poor's 500 Index <.SPX> slid 8.47 points, or 0.97 percent, to 863.16. The Nasdaq Composite Index <.IXIC> shed 10.81 points, or 0.71
percent, to 1,521.54. Markets will close early on Wednesday for Christmas Eve.

NYMEX-NEW YORK, Dec 23 (Reuters) - U.S. crude futures fell on Tuesday as concerns about falling demand in a weak economy continued to weigh on oil prices.

Trading was volatile as early lift from a weak dollar evaporated and weak economic data kept fears about sliding demand in a recession economy in focus.

On the New York Mercantile Exchange, February crude fell 93 cents, or 2.33 percent, to settle at $38.98 a barrel, trading from $37.79, a contract low, to $40.65.

CBOT-SOYBEANS - January up 14-1/2 cents at $9.01 a bushel. Market rallies to $9.00 strike price in January options. Concerns about dryness in South America and strong cash markets amid slow farmer sales and good export business with China underpinning soy market.

U.S. November soybean crush was 144.64 million bushels, according to Census Department data. Analysts had been expecting crushings between 145.5 and 146.5 million bushels.

CBOT-SOYOIL - January up 0.27 cent at 31.21 cents per lb. Choppy in thin holiday-type trade. Weakness in crude weighs.

November soyoil stocks were 2.562 billion pounds, Census said.

FCPO-KUALA LUMPUR, Dec 23 (Reuters) - Malaysian crude palm oil futures fell 3.6 percent on Tuesday, extending midday losses as the market tracked declines in other vegetable oils and crude prices hovered below $40 a barrel.

The benchmark March 2009 contract on Bursa Malaysia's Derivatives Exchange fell 58 ringgit to 1,530 Malaysia ringgit ($441.8) per tonne. Falls in other traded months <0#KPO:> ranged between 45 ringgit and 58 ringgit. Overall trade fell to 8,722 lots of 25 tonnes each from the usual 10,000 lots.

REGIONAL EQUITIES-BANGKOK, Dec 23 (Reuters) - Most Southeast Asian stock markets fell on Tuesday amid signs of a deepening economic slump and as investors locked in profits ahead of the year-end holidays.

Singapore's benchmark Straits Time Index <.FTSTI> fell 1.2 percent to its lowest close since Dec. 5, with DBS Group , Southeast Asia's largest bank, slipping 3.5 percent and palm oil giant Wilmar sliding 5.8 percent.

Indonesia's main stock index <.JKSE> drifted 0.12 percent lower at the close after earlier touching 1,323.49 points, its lowest since Dec. 15.

Malaysia's main stock index <.KLSE> fell for a third day, down 0.3 percent, as palm plantation firm Kuala Lumpur Kepong dropped 2.2 percent and energy services firm KNM Group lost 3.7 percent.

DJI Daily: pre-Christmas mood

Market weakened further as players were in pre-Christmas mood. For downside, support remains at 8118-8140. while, upside resistance is at 8600-8680 level.

KLSE Daily: defended well

Market was trying to defend with a late session rebound to close at 870 mark. We maintain our view on sideways to little bias upside potential in near term market. Continue to look for the resistance at 880. Downside support is pegged at 858-853.

FKLI Daily: Surprise !!

Market gives a surprise move with prices manage to recoup from early losses to end in positive territory. Support at 869.5-865 was tested in intra-day basis. As for now,we look for the next support at 863.5-862.5. For upside, resistance is at 891.5-897.5.

FCPO Daily: ranging between 1500-1600

Market fully covered the downside gap at 1569-1548 to end at day low yet it manage to stay firm at 1500 mark. Market likely to continue its rangy mode in near term. For upside, resistance is at 1596-1600. Downside support is pegged at 1509-1487

Trader's Comment: Palm oil futures fell broadly lower amid weaker Asian time global vegeoil.

Palm oil futures fell broadly lower amid weaker Asian time global vegeoil. Benchmark Mar09 merely hit the intra day high of 1569 after opened RM20 lower at 1568 following overnight NYMEX crude oil dropped to below $40 level again. It then fell to 1557 but managed to support as it hovered between 1560-1565 level through out the whole morning session. However, inadequate follow through buying activities saw CPO prices began to sell down after second session resumed trading. Lower eCBOT soy oil and Dalian palm coupled with further drop of Asian time crude oil sent Benchmark Mar09 continue to fall and settled at intra day low of 1530. Market tone was not as firm as yesterday due to position squaring ahead of the coming holiday season.

Updated CPO Tender Summary and Delivery Location for the year 2008

Announcement: Closure of Bursa

Bursa Malaysia will be closed on the following dates in conjunction with:-

Christmas Day, 25th December 2008 (Thursday)
Awal Muharram, 29th December 2008 (Monday)
New Year, 1st Jan 2009 (Thursday)

We wish all our clients and associates Merry Christmas & Happy New Year.