【Fujitomi】Overseas crude oil falls sharply on disappointment selling

（NY Precious Metals）
On the 25th, within a box-range movement, New York gold edged higher slightly. New York gold near-term June contract rose by 3.3 dollars from the previous day to 1,256.4 dollars, and New York silver near-term July contract rose by 5.6 dollars to 952.9 dollars.
Around 1,260 dollars had been a major barrier, but there was movement to hold in the 1,250-dollar range, and it stayed in positive territory all day. The continued rise of the US Dow also kept it near the 1,260-dollar resistance, but its price action remained firm despite the Dow’s rise. Concerns about a drop in the Dow attracted buying as well. With Memorial Day a holiday in the United States at the start of the week, hedge buying ahead of the holiday and the expected testimony by the outgoing FBI director to Congress after the holiday were in focus, helping to maintain the 1,250-dollar range. Although a June rate hike by the US is largely priced in, once June begins, the situation may come under renewed vigilance.

（WTI crude oil, NY petroleum products, North Sea Brent）
On the 25th, WTI crude oil fell sharply on disappointing selling. WTI nearest July contract fell by 2.46 dollars to 48.90 dollars, North Sea Brent near-term July contract fell by 2.50 dollars to 51.46 dollars. RB Oil gasoline July contract fell by 4.57 cents to 160.19 cents, NY heating oil near-term July contract fell by 5.56 cents to 155.52 cents.
At the OPEC General Assembly, a nine-month production cut extension was decided, and non-member countries later followed in discussions. Regarding the duration of the cuts, nine months or twelve months were discussed at the general assembly, with nine months deemed the best conclusion. In comments from oil and energy ministers before the meeting, there were repeated indications that expanding the cut was not expected, leading to a drop in both WTI and Brent even before the meeting as investors anticipated disappointment. However, with the addition of a twelve-month cut duration that had not been present initially, some buying interest returned, but in the end, concerns about worsening supply-demand due to US production growth led to worry and, ultimately, disappointment selling. This was anticipated, and after the meeting, it was hard to expect price-supportive policies from producing countries for a while, resulting in a series of stop-loss selling. The next OPEC meeting is scheduled for November 30. Libyan and Nigerian production increases were allowed, but many member and non-member countries were negative about further cuts, so the announcement effect of additional cuts failed.

（CBOT Soybeans）
On the 25th, CBOT soybeans fell sharply, with the drop accelerated toward the close as crude oil plummeted, ending near the session lows. Nearby July contract fell by 9.75 cents to 938.50 cents, new-crop November contract fell by 9.75 cents to 938.25 cents.
The USDA’s weekly export bookings were within the expected range, but market focus remained on the crude oil market, and the drop in oil could not be ignored, resulting in a late-session price drop. In the downturn, global soybean oversupply was re-recognized, and although Chicago soybeans rebounded on value buying, selling accelerated as funds were unwound, driving prices down to the 9.30-dollar range. Many expect further decline remains inevitable.

（CBOT Corn）
On the 25th, CBOT corn fell due to weak weekly export bookings. Nearby July contract fell by 2.00 cents to 369.25 cents, new-crop December contract fell by 2.25 cents to 387.50 cents.
The USDA’s weekly export bookings were 457,000 tons, below the lower end of the pre-expectations of 600,000 barrels, and given the expectations were already low, the figures were weak, and prices slid after the release. While concerns about a sharp drop in crude oil were present, the decline was not as severe as oil, but toward the close, the drop widened to near the session lows. With no weather problems in the US corn belt, the rebound from crude oil’s sharp drop could be followed by a further decline before the three-day holiday. The Chicago grain market is planned to be closed on Memorial Day.
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