【Fujitomi】Tokyo oil market falls across the board

（Tokyo Crude Oil and Petroleum Products）
On the 31st, Tokyo crude oil and petroleum products were sold off due to overseas crude oil declines. The front-month crude oil October contract fell 470 yen from the previous day to 35,590 yen, the front-month gasoline December contract fell 490 yen to 48,150 yen, and the front-month kerosene December contract fell 630 yen to 49,200 yen.
The Tokyo petroleum market was pressured lower by overseas crude oil declines. Considering the U.S. trend toward increased crude production, there was a recognition of potential upside weakness, and WTI briefly tested the 49-dollar level. Tokyo crude oil subsequently tested 35,500 yen, but due to a recovery in NY gasoline and WTI, it rebounded to the 35,900 yen range during the night session. A similar rebound appeared in the early daytime trading, driven by speculative buying on anticipation of strong API inventory data. However, overseas crude oil, contrary to Tokyo market expectations, was sold off, and the front-month crude oil in the 35,900 yen range offered selling. While WTI and Brent remained soft, Tokyo saw a decline but overall showed a persistent undercurrent of resistance. The API inventory data to be released tomorrow morning is being watched, but even if the data is strong and rises, upside is limited, which would instead present selling opportunities. After around 14:30, WTI widened its decline, and a sub-49-dollar level in the night session could be anticipated. A stronger yen would further widen Tokyo crude’s downside, but the market still showed resistance to falling.

（Tokyo Precious Metals）
On the 31st, Tokyo gold continued to decline on the back of NY gold’s collapse. The front-month gold April contract fell 20 yen to 4,487 yen, and the front-month platinum April contract fell 30 yen to 3,371 yen.
Losers continued in Tokyo gold as NY gold fell sharply. The expectation of a rate hike in June FOMC was acknowledged, and funds flowed out of the gold market, which does not produce interest. Platinum’s decline was even more pronounced than gold’s, but the price drop was expected as a cleansing move entering June, resulting in Tokyo platinum continuing to fall sharply. For the moment, the 3,350 yen range is being maintained, but with active clearing selling in NY platinum markets in June, it underscores concerns about a bottom in NY platinum. Although Tokyo gold recovered to the 4,490 yen range in a weaker yen, the rebound due to NY gold’s softness was temporary.

（Tokyo Rubber）
On the 31st, Tokyo rubber initially rose but then was sold off again. The front-month November contract fell 5.2 yen to 202.5 yen.
The resumption of the Shanghai rubber market was watched, and as expected, it declined. However, Tokyo had already plunged in anticipation, triggering short-covering and pushing the front-month to 212.3 yen around 10 a.m. Nevertheless, given the deteriorating physical market, 210 yen remained a strong selling area, and as the night session low was breached, the fall accelerated, showing over 10-yen loss from the high after 11 a.m. The weakening of the yen during the price collapse provided some relief, but the rebound remained limited due to the continued weak physical market. Just before 3 p.m., it fell below 202 yen, and breaking 200 yen would be just a matter of time.

（Tokyo Corn）
On the 31st, Tokyo corn recovered on the back of a rebound in Chicago after the resumption. The front-month May contract rose 10 yen to 22,140 yen.
After the long weekend, Chicago fell sharply and the yen strengthened, and Tokyo dropped further, but the front month managed to stay above 22,000 yen. Since the decline was not enough, a breach of the big figure early in the day was anticipated. However, after the Chicago close, weather reports indicated worsening conditions in the eastern U.S. Corn Belt, so selling was restrained and the big figure was held. With the resumption of Chicago at 9 a.m. showing signs of recovery, the decline slowed and then reversed. By around 9:30 a.m., it rose to the 22,200 yen range, creating a movement that looked as if Chicago had not dropped. The overbought condition may be considered, but given Tokyo’s expectations of Chicago’s weakness after the holiday, this rebound is understandable. The weather forecast for midwestern U.S. corn belt in the coming days will be a key factor. In the eastern corn belt, rain is forecast from Friday to Sunday, so in the near term, Chicago’s rebound may be supported, but...

（Tokyo U.S. Soybeans）
On the 31st, Tokyo general soybeans fell sharply toward the close. The front-month April contract fell 910 yen from the previous week to 45,360 yen.
Chicago fell sharply for the third straight trading day, but Tokyo general soybeans remained largely inert. Fresh supply months saw some gains, but thereafter renewed selling pressure emerged, and with the yen strengthening, Tokyo prices became even more overvalued. A sudden drop could occur at any time. It closed with a sharp decline, but room for further declines remained.
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