【Fuji Tomi】 Tokyo Oil Market Soars Across the Board

（Tokyo crude oil and petroleum products）
On the 22nd, Tokyo crude oil and petroleum products were bought heavily in response to a sharp rise in overseas crude oil and a weakening yen. The October crude oil futures contract was up 780 yen from the previous week’s close at 37,120 yen, the November gasoline futures contract was up 690 yen at 49,870 yen, and the November kerosene futures contract was up 810 yen at 49,940 yen.
In the early part of the week, overseas oil markets continued to rise, which brought a further advance in the Tokyo oil market. WTI and Brent were climbing further, and at the OPEC Economic Committee meeting held toward the end of the week, in addition to extending production cuts, there was consideration of expanding the cut size, which served as supportive material. With larger cuts, more speculative buying could be expected. Until the general meeting on the 25th, a firm trend was anticipated. However, even if production cuts are expanded, it is unclear whether member countries will comply, and currently only Saudi Arabia is achieving the production cut target. That alone raises concerns about practical effectiveness, and after the general meeting, overseas crude might collapse in price, so one should stay long until then. In the afternoon, WTI fell from the earlier levels, while Tokyo prices showed some resistance to declines.

（Tokyo precious metals）
On the 22nd, Tokyo gold rebounded, but gained from the softening of NY gold faded from the high. The April gold futures contract was up 15 yen from the previous week’s close at 4,478 yen, and the April platinum futures contract was up 17 yen at 3,365 yen.
Tokyo gold rose on the favorable reaction to the weaker yen and higher NY gold, but fell back from the 4,480 yen level, narrowing the upside. This occurred because NY gold weakened in the morning, and the weakness in platinum and palladium at the start of the week contributed to the narrowing of NY gold’s gains. In the morning there were moments when 4,500 yen seemed attainable, but due to weak fundamentals for other precious metals, Tokyo gold’s upside remained heavy, reinforcing the sense of a difficult rise.

（Tokyo rubber）
On the 22nd, Tokyo rubber rose sharply at one point but trimmed the gains in the afternoon. The near-month October contract was up 2.8 yen from the previous week’s close at 227.7 yen.
The weekend night session showed a retreat in Tokyo rubber, but due to a sharp rise in the Shanghai rubber during after-hours and a large advance in the NY Dow, buying surged again at the start of the week, beginning around the 229 yen level. After 10 o’clock, it continued to rise to exactly 233 yen, and the near-month contract gained more than 10 yen from the night’s low. However, with the Shanghai market’s gains retreating, by the morning the front-month fell below 230 yen. Recently, there has been a pattern of price recoveries in the daytime after nighttime declines, so selling in the after-hours should be avoided. The market is beginning to be wary of an expiration-day effect.

（Tokyo corn）
On the 22nd, Tokyo corn advanced but the gains narrowed. The May near-month contract was up 280 yen from the previous week’s close at 22,380 yen.
In Chicago, the market recognized the weather concerns in the eastern U.S. Corn Belt and surged on the weekend, contributing to the overnight rise. Yet, there were high-price warning movements against the weekend surge, so on the following week’s start, gains narrowed and the price dipped below 22,300 yen. In the early hours of the next week, Chicago corn showed a mix of buying and selling at first, but gradually rose, with the July near-month hovering around $3.70, displaying the highest level since May 10. Support came from weekend rainfall in the eastern U.S. Corn Belt and the forecast for rain this week. Seeing this strong buying tendency, the front-month rose to the 22,400 yen range before 11 a.m., extending the overnight high. However, buying did not continue. With Chicago remaining firm and the yen softening, it is possible to infer a shift toward the strong Chicago trend, and considering the rainfall forecast, Tokyo’s reluctance to rise further suggests a prudent buying stance.

（Tokyo U.S. soybeans）
On the 22nd, Tokyo soybeans surged and then sharply fell. The April near-month contract was down 310 yen from the previous week’s close at 46,590 yen.
In the morning, the front-month surged and reached 47,500 yen, reacting excessively to the Chicago rise. In reality, after warning of being overbought, the near-month quickly fell below 47,000 yen, and by midday a further decline occurred. This produced a selling pattern at the peak, but the stance of selling on price spikes remains unshaken.
https://www.fujitomi.co.jp/?p=15307