[Fuji Tomi] Tokyo oil market extends gains, using the weaker yen as a favorable factor

(Tokyo crude oil and petroleum products)
On the 29th, Tokyo crude oil and petroleum products continued to rise, with the rise in petroleum products prominent as on the previous day. The front-month crude oil August contract rose 440 yen to 35,220 yen, the front-month gasoline October contract rose 610 yen to 48,420 yen, and the front-month kerosene October contract rose 730 yen to 46,580 yen.
AT NIGHT, overseas crude oil gains were a supportive factor in the early session, but afterward overseas crude oil retreated from its highs. In this price-weakening phase, a weaker yen acted as a support, and the Tokyo oil market continued to rise. In the day session, with a weakening yen and the same as the previous day, the gains in Tokyo gasoline and kerosene contributed to crude oil reaching new nighttime highs. Thereafter, movement became mixed, using the yen rate and overseas crude as factors. In the market there were observations of overseas crude oil rising in European time due to Libya's production cuts, making it easier to buy, but as on the previous day, the sharp gains in Tokyo gasoline and kerosene remained a supportive factor for crude oil. Despite consecutive large gains, thin trading appeared to be affecting and amplifying the upside. The EIA inventory figures in the United States will be released at 23:30 Japan time, and attention will be on whether US crude production increased for the sixth consecutive week.

(Tokyo precious metals)
On the 29th, Tokyo gold rose slightly on the back of a weaker yen, marking a small gain. The front-month February gold contract was up 7 yen to 4,453 yen, while the front-month February platinum contract was down 36 yen to 3,404 yen.
Tokyo gold continued to rise modestly. Around 10 o’clock, the decline in NY gold widened, briefly pushing Tokyo gold below 4,450 yen, but due to the yen’s advance, it recovered to the 4,450 yen level by 11 o’clock. NY gold fell to 1,250.0 dollars before noon, briefly below the previous day’s low, but managed to stay above 1,250 dollars for the moment. Tokyo gold has been moving in a narrow range with subdued trading. Meanwhile, Tokyo platinum plunged rapidly. NY platinum cannot be covered by the weak yen. Like gold, it has not become a hedges target, and with expected future demand shrinking, platinum is expected to be sold on any rallies from here on.

(The Tokyo Rubber)
Tokyo rubber on the 29th rose sharply on favorable external factors. The front-month August contract rose 5.8 yen to 244.0 yen.
Tokyo rubber surged broadly. With a rapid rise in the NY Dow, a weakening yen, plus higher Shanghai rubber in after-hours, and higher plantation offer prices, expectations of a strong rise in the morning emerged, with the front month starting in the 240 yen range. After quickly reaching a high of 246.5 yen, the price eased back to near the morning low as buying cooled. However, it was bought again, keeping the rapid rise intact. This surge has raised concerns of near-term support after early-week declines, and technical buying appears to be influencing the move, with bears reluctant to sell, suggesting a rebound could continue. Earlier around noon, the price retreated to the 241 yen range, but later recovered. After several dips to the 241 yen level, considering the subsequent recovery, there appears to be a near-term bottom around 240 yen.

(Tokyo Maize)
Tokyo maize on the 29th rose sharply on the back of a weaker yen and higher Chicago prices. The front-month March contract rose 80 yen to 21,710 yen.
Chicago's ongoing rise had been reflected in Tokyo's daytime trade, but during the night session, the weaker yen supported further gains, with the front month being aggressively bought. In the daytime, the weaker yen sent prices higher, reaching a high of 21,870 yen. However, as the yen weakened, Chicago prices fell again, and the gains narrowed. A relatively strong buying back has been seen since the start of the week, but with the yen stronger than at the end of last week’s night session and Chicago prices near the same level, the level of buying ahead of the weekend night session seems somewhat odd. With the renewed drop in Chicago, the gains have narrowed thereafter. The sharp buying push has, in a sense, expanded the room for downside, and after 1 p.m. there was vigilance about the aggressive buying, with the gains gradually narrowing, though not enough to justify a decline.

(Tokyo U.S. soybeans)
Tokyo generic soybeans on the 29th fell on the front month. Front-month February soybeans fell 280 yen to 47,190 yen.
The front-month December contract tumbled, with the new-crop futures month heavily bought in the spreads, so this is a correction in price. With expectations of further expansion of U.S. soybean planting area in 2017, potential future oversupply is a concern, making the new-crop futures month prone to selling, and dipping below 47,000 yen is only a matter of time. For now, both front-month 2-month futures remain in the 47,000 yen range.
https://www.fujitomi.co.jp/?p=14058