【Fujitomi】Tokyo gold declines, concerns about the heavy upside in NY gold

（Tokyo crude oil and petroleum products）
On the 30th, Tokyo crude oil and petroleum products traded within a box range, with mixed tones. The front-month crude oil contract for October was down 20 yen at 36,060 yen, the front-month gasoline contract for December was up 30 yen at 48,640 yen, and the front-month kerosene contract for December was down 120 yen at 49,830 yen.
In after-hours trading, Tokyo’s oil market continued to advance, buoyed by the upside in NY gas and the reversal of WTI and Brent, while the crude front-month prices renewed their highs from the previous day. In daytime Tokyo trading, the gains in crude were likely to narrow. The movement around 50 dollars for WTI remained roughly at the same price level as the early morning of the previous day. However, with the yen strengthening, considering the yen’s appreciation, the downside remained insufficient. In the 10 o’clock hour, as the yen strengthened and WTI retraced, the front-month crude prices fell into negative territory. It had stubbornly held around 36,000 yen, but after a little past 11:00, it finally dipped below the big round number, though it stubbornly did not fall much more. In the afternoon, as the yen paused and WTI recovered, Tokyo’s oil market also staged a rebound, with the front-month crude returning to positive territory. While reactions to weak factors were subdued, the market showed sensitivity to supportive factors, suggesting overbought levels.

（Tokyo precious metals）
On the 30th, Tokyo gold fell due to the appreciating yen and the heavy tone in NY gold. The April front-month gold contract was down 9 yen at 4,507 yen, and the April front-month platinum contract was down 25 yen at 3,401 yen.
The yen’s appreciation weighed on Tokyo gold. In the 10 o’clock hour, Tokyo gold finally benefited from a stronger yen and a weaker dollar as NY gold was bought, but Tokyo gold could not fully offset the yen’s strength, fluctuating around 4,510 yen. After noon, when the yen’s gain paused, NY gold’s rebound faded again, widening Tokyo gold’s downside. Tokyo platinum fell even more than gold, as NY platinum anticipated increased activity in June trading and weakened further. With weak physicals, switching to futures was passive, and NY platinum’s downside continued to be watched going forward. After noon, as NY gold again shed value, Tokyo gold fell further. The weight of NY gold’s upside was evident.

（Tokyo Rubber）
On the 30th, Tokyo rubber saw continued steep declines centered on nearby contracts. The front-month November contract was down 5.3 yen at 207.7 yen.
The front-month suffered a sharp drop, and in after-hours trading there was further downside. The current front-month had fallen from the 300-yen level, but compared with the nearby July contract, the nearby was still carrying a large premium, suggesting further normalization of the backwardation and weighing on the front-month. In daytime trading, the market remained soft; after 9:30, the front-month fell below 210 yen, triggering stop-loss selling and sliding to 206.7 yen. It then rebounded to the 209 yen range, but with the 210 yen level as a resistance, a further rise in the yen and a fall in stocks pushed it to new lows. Before noon, a recovery to around 205 yen on the front-month appeared, but despite this, there was not enough buyback to turn it around. Attention on Shanghai Rubber after the holidays may not have provided a selling trigger, as it had already priced in the decline.

（Tokyo Corn）
On the 30th, Tokyo corn sold off into the front month due to Chicago’s post-holiday decline and a stronger yen. The front-month May contract was down 170 yen at 22,130 yen.
As for Chicago corn after the holidays, it fell back. Weather risks had supported buying before the holidays, but the weather did not justify higher risk, so Chicago saw declines. In Tokyo, at the outset, Chicago’s decline and further yen appreciation did not trigger selling, and it stubbornly held around the 22,300 yen level. After 10:00, it finally slipped below 22,300 yen, but weakness attracted little reaction, and trading remained subdued. Just before noon it dropped below 22,200 yen, but there was still reluctance to fall further. Volume was lackluster, suggesting many positions were deferred; selling to push for a further decline should be considered. Meanwhile, July—the near contract—rose sharply in the afternoon, but that was likely due to position liquidations ahead of June’s settlement, which did not align with external factors for the front month, and thus did not provide strong supportive signals. After 1:00 PM, as it widened its decline, volume did not accompany the drop, leaving room for further downside.

（Tokyo US Soybeans）
On the 30th, Tokyo grains for soybeans were ultra-thinly traded. The front-month April contract was up 40 yen at 46,270 yen.
With Chicago’s further decline after the holidays and the stronger yen, trading activity remained muted. Considering Chicago’s sharp drop before the holidays, Tokyo’s front month should have fallen well below 46,000 yen, yet it did not. Chicago after the holidays signaled renewed selling pressure, and Tokyo’s muted reaction suggested that a steeper drop could occur at any time.
https://www.fujitomi.co.jp/?p=15558