【FujiTomi】 Tokyo oil market plunges, but declines are notable only slowly / holding up

（Tokyo crude oil and petroleum products）
On the 8th, Tokyo crude oil and petroleum products fell sharply, but did not respond much to the overseas crude oil plunge and continued to show a restrained drop. The October crude oil futures settled at 34,800 yen, down 810 yen from the previous business day; November futures for gasoline settled at 47,870 yen, down 610 yen; November futures for kerosene settled at 47,550 yen, down 820 yen.
The Tokyo oil market after the holidays continued to decline, but the magnitude of the drop narrowed from the levels seen in the night trading before the holidays. The depreciation of the yen and the rebound in overseas crude oil at the start of the week are considered influential. However, from the price levels at the close of the night trading before the holidays, overseas crude oil had already fallen sharply, and even when factoring in the early-week rebound, a fall of around 1,000 yen in crude was not surprising. In other words, a recovery to the 35,000 yen level for crude futures would have been excessive, and there was nothing wrong with a move to the mid-34,500 yen range; overseas crude oil had fallen sharply. After dropping below 35,000 yen, it had traded in a narrow range, with no change in the overvalued price level. With the expectation of a technical rebound in overseas crude oil, buying appeared prudent, but Tokyo prices were likely to have capped upside due to the continuing decline. Before 13:00 Japan time, China’s trade balance showed crude oil imports in April at 34.39 million tons (down 11.7% from the previous month, up 5.6% from the same month last year) and product imports at 2.49 million tons (down 7.8% from the previous month, down 0.8% year-on-year). This was viewed as bearish, but in overseas markets technical buying was still dominant. Toward the close, as WTI rose, Tokyo crude oil was sold off and marked a new morning low.

（Tokyo precious metals）
On the 8th, Tokyo gold fell sharply due to the sharp drop in NY gold. The April futures for gold were down 62 yen from the previous business day to 4,447 yen, and the April futures for platinum were down 26 yen to 3,340 yen.
After the holidays, Tokyo gold plunged, briefly dropping below 4,450 yen. Following the FOMC statement, expectations of a June rate hike rose, accelerating withdrawal of funds from NY gold markets, causing a plunge to the 1,220-dollar level. After the French presidential election results, it fell to as low as 1,221.0 dollars at the start of the week, marking a new weekly low. However, it quickly recovered to the 1,230-dollar range, but did not exceed the high of 1,236.0 dollars from the end of the previous week, and thereafter gains diminished. The decline from NY gold’s high also influenced Tokyo gold, which showed a break below 4,450 yen. After 14:30, NY gold traded under 1,230 dollars, and Tokyo gold posted a new low, though the rise in the Nikkei 225 contributed to some of the move.

（Tokyo rubber）
On the 8th, Tokyo rubber fell sharply in line with the Shanghai drop during the holidays. The October futures were down 15.1 yen from the previous business day at 206.6 yen.
During the holidays, Shanghai rubber movements drew attention, but due to the global commodity plunge, selling intensified, and prices tumbled from 15,000 yuan. Reluctant to buy the dip, early trading saw selling overwhelm, with Tokyo front-month prices opening in the 205 yen range and later showing a low of 205.1 yen. The yen’s depreciation and a sharp rise in the Nikkei helped some comeback to 209.8 yen, but 210 yen remained a barrier, keeping the market soft.

（Tokyo US soybeans）




On the 8th, Tokyo soybeans were listless. The May futures were up 440 yen from the previous business day to 47,320 yen.
After the holidays, Tokyo general soybeans trading was listless and driven by position. In the afternoon, China’s April soybean imports were 8.02 million tons, up 26.7% from the previous month and up 13.4% from the same month last year. On the surface, this could support Chicago, but it is considered to reflect increased imports from South America. At the start of the week, Chicago prices were unlikely to fall further, and Tokyo prices were expected to stage a relief rally.
https://www.fujitomi.co.jp/?p=14965