【Fuji Tomi】 Tokyo gold and silver rebound

(Tokyo crude oil and petroleum products)
Tokyo crude oil and petroleum products for the day continued to fall, but the decline narrowed following the optimistic U.S. API report. For the crude futures for October, the settlement was 270 yen lower at 35,320 yen; gasoline futures for December were 150 yen lower at 48,000 yen; kerosene futures for December were unchanged at 49,200 yen.
In addition to the U.S. trend toward higher crude production, increases in Libya and Nigeria were confirmed, causing WTI and Brent to plunge simultaneously, and Tokyo crude oil temporarily dropped more than 1,000 yen. It may have been position adjustments ahead of the U.S. API announcement, but the losses narrowed as Tokyo closed its night session. The anticipated U.S. API stock report pointed to a sharp drop in crude inventories, a fairly strong indication. After the report, WTI and Brent rebounded, and a narrowing of Tokyo’s declines was anticipated. In fact, there was a visible rebound in the morning, with somewhat aggressive buying noticeable. However, overseas crude was still much weaker than the previous day’s close, making the morning rebound seem excessive. Subsequently, as WTI rose and then paused, forced buying pushed prices down again. With weak Chinese economic indicators, WTI and Brent further reduced their gains, but Tokyo’s reaction remained lackluster. To avoid further declines, attention was drawn to a weaker yen and a rising Nikkei average. With the dollar/yen recovering and the Nikkei hitting a new high in the 14:00 hour, the November crude contract recovered into the 35,400 yen range. The U.S. EIA report highlighted crude production and gasoline demand, but it’s possible that a high price would be followed by a decline once people figure things out.

(Tokyo precious metals)
Tokyo gold for the day rose in response to a sharp rise in NY gold. Gold futures for April were 19 yen higher at 4,506 yen, and platinum futures for April were 12 yen higher at 3,383 yen.
The rise in NY gold was welcomed, lifting Tokyo gold back above 4,500 yen. Monday in Tokyo had been dominated by a notably pessimistic mood, but NY gold’s sharp rise pushed the bearish mood back. Still, given that prices had repeatedly fallen far from the 4,500 yen level, selling to cover positions in Tokyo gold around the weekend’s U.S. employment data is expected. On the back of weak Chinese economic indicators, NY gold was bought again, but it is also possible it could fall below 1,270 dollars again. Tokyo platinum was also bought back but faced strong resistance at 3,400 yen, so a selling-on-rally stance remains prudent.

(Tokyo rubber)
Tokyo rubber for the day continued to fall, with the near-month contract down 3.8 yuan at 198.7 yen.
A continuation of a soft tone from the night session led to a heavy sell-off before 10:00 at around 200 yen, marking a low of 196.1 yen. However, given that it had fallen about 20 yen since the new season began, there was some fear of excessive selling, and the decline paused afterward. At 11:00, it recovered back to around 200 yen. Yet, as the near-month contract continued to fall and the nearby contract did not fully recover, further decline seemed inevitable in the absence of supportive factors for an increase in production. By the way, starting today Bridgestone will raise tire prices, a factor tied to price surges in the latter half of last year. Since prices have fallen sharply this year, there is a lag, so a possible price reduction could occur toward year-end. The weekend could see further erosion in prices. Although there was some rebound toward the close, price discovery remained skewed toward selling.

(Tokyo corn)
Tokyo corn for the day continued higher in the near-month contract, but ended with somewhat forced buying showing signs of overheating. The May contract was 1,200 yen higher at 22,260 yen.
In thin trading, Tokyo corn moved with variable buying. Chicago rose briefly but retreated significantly from its highs, and this time too, the upper boundary of the Ichimoku cloud serves as resistance, suggesting a near-term correction. As a result, Tokyo’s gains cooled. On the other hand, there was selling pressure because the previous day’s highs had been marked down, and also due to the shift in planting from corn to soybeans in the eastern U.S. Corn Belt. The near-term futures edged higher again near the close, but remained overvalued. The key near-term factor will be the weather in the eastern U.S. Corn Belt. In the 14:00 hour, yen depreciation accelerated, pushing the front-month higher. Despite yen depreciation and the relative weakness of Chicago prices, buying pressures were somewhat excessive.

(Tokyo soybeans from the U.S.)
Tokyo canola/soybeans for the day were mixed. The May contract was 2,000 yen higher at 45,560 yen.
Tokyo soybeans continued to fall. After the previous session’s close, they finally reflected the sharp fall in Chicago, but ignoring the Chicago drop and the stronger yen, they remained weak, and today’s decline was inevitable. The front-month price could fall below 45,000 yen. The shift of crops from corn to soybeans in the eastern U.S. Corn Belt will weigh on soybeans as well. The close saw the front-month extend, but at still relatively high levels.
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