【Fujitomi】Tokyo oil market down sharply

（Tokyo Crude Oil and Petroleum Products）
Tokyo crude oil and petroleum products on the 22nd fell sharply due to a double blow from a plunge in overseas crude oil prices and a stronger yen. The August contract for Crude Oil Futures settled down 1,120 yen at 34,570 yen, the September contract for Gasoline Futures down 1,120 yen at 48,510 yen, and the September contract for Kerosene Futures down 1,120 yen at 44,210 yen.
The Tokyo oil market broadly fell sharply due to the substantial ongoing drop in overseas crude oil prices and the stronger yen. Considering that the market had previously shown a strong buying trend despite the yen’s advance, indicating a reluctance to decline, the nighttime drop was arguably lacking. In the morning, DOE/API oil inventory statistics showed crude oil stocks rose by 4.5 million barrels from the previous week, while gasoline stocks fell by 4.9 million barrels, resulting in a lukewarm market reaction. The nearby WTI May contract held around the 48-dollar level. However, due to the morning yen strength, Tokyo saw a fresh low during the night. As the yen paused, the decline narrowed. The 1,000 yen drop in the crude oil futures did not occur. In the near term, attention should be on the US EIA oil inventory statistics; the key points are whether US crude oil stocks will reach a record high and whether oil production will increase for the fifth consecutive week. With WTI dipping below 48 dollars just before 15:00, Tokyo crude oil futures fell by more than 1,000 yen.

（Tokyo Precious Metals）
On the 22nd, Tokyo gold rebounded as NY gold surged. The February contract for Gold Futures rose 11 yen to 4,453 yen, and the February contract for Platinum Futures fell 4 yen to 3,569 yen.
Faced with a sharp drop in the NY Dow, NY gold was bought as a hedge, showing around the 1,240-dollar level, and Tokyo gold was bought again. It was a sharp rise in NY gold that absorbed further yen strength. After the resumption, NY gold was bought up to 1,246.9 dollars, but failed to break the previous high of 1,247.7 dollars. Accordingly, Tokyo gold moved to resist around 4,460 yen in intraday trading, while holding around the 4,450 yen level in a narrow range. While NY gold’s pullback may be expected in the near term, the bullish stance should be maintained with a view to buying on dips.

（Tokyo Rubber）
On the 22nd, Tokyo rubber fell sharply on a stronger yen and Shanghai’s declines. The August contract for Futures settled down 14.0 yen at 249.0 yen.
Overseas, further declines in Shanghai rubber and a rising yen pushed Tokyo below 260 yen in the morning, forming a resistance around 260 yen. At 10:00, as Shanghai rubber resumed its sharp decline, Tokyo broadened its losses and fell below 250 yen at 10:30. The decline in Shanghai rubber is believed to be driven by the near-month selling in Shanghai rubber. With stockpiles rising in Shanghai, the market’s consolidation in Shanghai appears to have accelerated. Going forward, the market should keep a close watch on Shanghai rubber’s movements.

（Tokyo US Soybeans）
On the 22nd, Tokyo general soybeans showed little reaction to weak data and remained mixed. The February contract for Soybeans settled down 470 yen at 48,580 yen.
During the night, the near-month price fell below 49,000 yen again. Although there was an initial rebound to around 49,000 yen, it soon retreated as the yen strengthened. With Chicago continuing to decline, Tokyo soybeans kept falling below 20,000 yen. After the market reopened, Chicago’s continued decline pushed the night low lower, falling below 18,000 yen. Given the previous day’s sharp drop, there are concerns about excessive selling, but Japan’s government’s partial ban on imports of Brazilian poultry has drawn attention to Brazil’s meat-recall situation. As the world’s largest exporter of broilers, a shift from feed to export could further pressurize Chicago prices, keeping the downward pressure alive.

（Tokyo US Corn）（Tokyo US Soybeans）
On the 22nd, Tokyo corn fell sharply, dropping below 22,000 yen. The March contract settled down 240 yen at 21,840 yen.On the 22nd, Tokyo general soybeans failed to react to weak data and remained choppy. The February contract settled down 470 yen at 48,580 yen.
With Chicago continuing to slide and the yen strengthening further, Tokyo corn kept declining and fell below 22,000 yen. The morning saw a brief rebound to around 21,980 yen, then a retreat due to the stronger yen. As Chicago resumed its declines, the night low was renewed, falling beneath 21,800 yen. Given the previous day’s sharp drop and the risk of excessive selling, but with Japan's government having partially banned Brazilian poultry imports, attention will continue to Brazil’s meat adulteration developments. As the world’s largest exporter of broilers, there is a real possibility of a shift from feed use to export use, which could remain a downward pressure on Chicago prices.During the night, the near-month price again fell below 49,000 yen. Although there was a brief rebound, the decline remained persistent, with selling pressure unchanged. The weakness in South America is expected to intensify, and a relief rally is likely to be followed by a larger下げ, so 48,000 yen should also be watched closely.
https://www.fujitomi.co.jp/?p=13894