FCPO related news

Malaysian  crude palm oil futures slipped to the lowest in nearly a fortnight, as traders booked profits with market focus shifting to rising stocks level in the world's second-largest producer.  

The benchmark November contract on Bursa Malaysia Derivatives ended 1% at 3,000 ringgits a metric ton after falling as much as 1.7% to MYR2,978/ton, the lowest since August 20.

U.S. soybean futures rallied Wednesday as strong demand and worries about diminishing U.S. supplies continued to support prices. The soybean market is maintaining price strength because record-high futures haven't cooled demand for soybeans from end users such as food processors and exporters. Spillover support was  seen from new buying in corn and wheat futures. Also supporting soy oil price are continued buying interest from China.

BMD CPO futures are trading higher, buoyed by short-covering and optimism that overall August export shipments will rise 5%-6% on month following Malaysia's move to increase shipping quotas for tax-free CPO. "A break above MYR3,030/ton may invite more buying interest and drive values to MYR3,070/ton today," a technical analyst in Kuala Lumpur says, though she warns that cautiousness may set in later during afternoon trade as investors limit their exposure to riskier assets ahead of U.S. Federal Reserve Chairman Ben Bernanke's speech at a Jackson Hole symposium Friday. Benchmark November CPO is up 0.7% at MYR3,022/ton. (shie-lynn.lim@dowjones.com)

Today’s Support and Resistance are located around 2970 and 3050  respectively.

FKLI related news

Stocks managed to eek out small gains today in another day of light trading that is typical for the week before Labor Day. The economic reports today were stronger than expected, with home sales data providing another indicator that housing has finally bottomed after being a major drag on the economy since 2008. GDP growth was also better than expected. Not necessarily robust, but better, which indicates the slow economic recovery continues. Hurricane Isaac drenched the Louisiana Coast with flooding rain but property and casualty stocks didn't get hammered as damage appeared to be relatively modest, at least in comparison to the devastation wrought by Katrina.

The Dow Jones Industrial average added four points to close at 13, 107. Overall, we wouldn't put a lot of stock in what the market does over the next couple of days given the low volume. The real direction for stocks won't be clear until September, when the pros in both Europe and the U.S. return from their summer holidays. (Indie Research)

0926 GMT [Dow Jones] Malaysia shares close down 0.1% at 1645.58, with select plantation stocks facing selling pressure amid falling palm oil prices. "With another long weekend ahead of us, expect to see some consolidation in the market through Thursday," says a local dealer; he tips the broader index to move in a 1645-1652 band in the near term.

FKLI related news

NEW YORK (Reuters) - Stocks ended little changed in another day of scarce activity on Tuesday after mixed economic data gave investors little reason to shift their focus from Federal Reserve Chairman Ben Bernanke's speech on Friday.

The Fed chief is scheduled to address a conference of central bankers in Jackson Hole, Wyoming, and could announce new measures to boost growth. While Bernanke is expected to keep alive expectations for a third round of major bond buying by the Fed, or quantitative easing, he could keep markets guessing about the actual timing.

Oil prices rose on Tuesday as Hurricane Isaac approached the U.S. Gulf Coast, forcing companies in the region to close down oil production platforms and refineries.

There is not much information shown on daily chart except that market is now congesting at around 1,650 level, which also serve as immediate resistance level. Today’s Support and Resistance for spot month index futures is located around 1,645 and 1,650 respectively.

FCPO related news

Crude palm oil futures on Malaysia’s derivatives exchange ended lower Tuesday as investors booked profits after the market rose to the highest level in six weeks.

The benchmark November contract on Bursa Malaysia Derivatives ended 2% lower at 3,029 ringgits a metric ton after moving in a MYR3,024-MYR3,078 range. The contract rose Monday to MYR3,122/ton, the highest since July 17.

"Palm oil prices have eased, but declines are in line with the broader markets," an analyst at a Kuala Lumpur-based bank said, adding that the market will likely remain range-bound as investors may refrain from making aggressive bets ahead of U.S. Fed Chairman Ben Bernanke’s remarks at Jackson Hole symposium on Friday.

Forecast for rain in parts of U.S. Midwest and declines in Chicago soyoil futures also added to the selling pressure, market participants said.

Still, palm oil’s losses were limited due to steady export demand and forecasts for lower August production as harvesting slowed during the Muslim fasting month and Eid celebrations. Planters said production in the first 20 days of August fell 4% from a month earlier.  (Dow Jones Newswires)

Technically, there is sufficient indication for further market weakness as there was at least two lower lows and lower highs formation on the 15 minute chart. Yesterday’s closing price also created a new lower low. Today’s Support and Resistance level is located around 2,980 and 3,020 respectively.

FCPO related news

Malaysian crude palm oil futures rose to a 6-week high on Monday, as traders continued to bet on tight global edible oil supplies with no sign of the drought easing in the soy-producing U.S. Midwest. (Reuters)

Traders are taking profits off the table in the absence of fresh news to support higher prices. Meanwhile, Malaysia's Aug. 1-20 palm oil exports rose 3.9% from a month earlier to 798,431 metric tons, cargo surveyor SGS (Malaysia) Bhd. said Monday.

The assumption that rains associated with Tropical Storm Isaac will benefit late-developing soybean crops in the Mississippi Delta  region and parts of the Midwest later in the week attracted light selling as well, but traders remain cautious as analysts generally think it is too late for the rains to substantially boost crop yields.

Brent crude oil futures fell toward $112 a barrel on Monday, reversing early gains as Tropical Storm Isaac shuttered refineries on the U.S. Gulf Coast, cutting demand for crude.

FCPO -  LATEST PREDICTIONS

SAO PAULO, Aug 24 (Reuters) - Brazil's grain industry association Abiove expects the world's No. 2 soy producer to turn out a record new crop of 81.3 million tonnes, possibly surpassing output from the drought-stricken United States for the first time, Abiove said on Friday. "Brazil will be the largest producer in the world if the United States doesn't recover from the averse climate," Abiove said in a report.

Aug. 17 (Bloomberg) -- Palm oil is set to drop 8.5 percent to the lowest level in 22 months as a slowdown in China and India, the top users, curbs demand and rising Malaysian output boosts inventories, said an analyst at Frost & Sullivan. Prices may decline to 2,700 ringgit ($862) a metric ton in the next three weeks unless crude oil rises, which would make palm more attractive as a biofuel, said Global Vice President of Consulting Chris de Lavigne, who correctly forecast in December that futures would reach 3,500 ringgit in the first half before declining below 3,000 ringgit. Prices were last less than 2,700 ringgit in October 2010.

The outlook is similar to a forecast made in June by Dorab Mistry, director of Godrej International Ltd.
“I don’t really see any catalysts for palm prices to go much above 3,000 ringgit,” de Lavigne said in a phone interview from Singapore on Aug. 14. “There’s a lot of supply. Until we see a more buoyant global economy and higher crude oil prices, I don’t foresee CPO making a bounce back,” he said, referring to
crude palm oil by its initials.

FKLI related news

U.S. stocks fell, following the first weekly decline in about two months for the Standard & Poor’s 500 Index, as investors awaited indications on whether the Federal Reserve will provide further stimulus measures. (Bloomberg)

Most Asian stocks rose as investors await a report on U.S. gross domestic product that’s expected to show growth in the world’s biggest economy is improving and indications of policy direction from the Federal Reserve.

Emerging-market stocks dropped to a three-week low as Chinese industrial companies in July posted their biggest decline this year, heightening concern that global demand for natural resources will continue to ebb. The MSCI Emerging Markets Index (MXEF) fell 0.5 percent to 960.86 at 5.20 p.m. in New York, the lowest close since Aug 3. Samsung Electronics Co. declined the most in almost four years in Seoul after U.S jury ruled it infringed Apple Inc.’s patents.  Samsung Electronics, the heaviest weighted stock on the MSCI Index, fell the second most of  any stocks on the gauge.

NEW YORK (Reuters) - Shares of Apple climbed to another record on Monday, keeping the Nasdaq index afloat in the lowest trading volume of the year, with investors looking ahead to a key speech by Federal Reserve Chairman Ben Bernanke on Friday.

Apple Inc (AAPL) hit an all-time high of $680.87 during the day after the iPad maker won a $1 billion judgment in a patent lawsuit against Samsung Electronics <005930.KS>. The Korean company said it would contest the verdict. Apple, the world's most valuable company, ended up 1.9 percent at $676.68.

The verdict on Friday jolted shares of Google Inc (GOOG.O), as the case could change the dynamics of the mobile device market. Companies using Google's Android system may have to consider design changes. Google shares declined 1.4 percent to $669.22.

Beyond the notable moves of those tech giants, investors mostly cooled their heels before Bernanke's remarks to central bankers at Jackson Hole, Wyoming, on Friday.

FCPO related news

Crude palm oil futures on Malaysia’s derivatives exchange ended higher Friday, underpinned by gains in Chicago soyoil futures and firm demand for palm oil. The benchmark November contract at Bursa Malaysia Derivatives ended 0.3% higher at 3,069 ringgit a metric ton after moving in a MYR3,066-MYR3,097 range. (Palm Oil HQ)

Palm oil prices have risen 4.3% since the beginning of August and hit a five-week high of MYR3,100/ton Thursday as declining outlooks for rival soybean crops in the U.S. and South America point to tighter global vegoil supplies.

The tropical oil could move higher in the coming weeks, as poor soybean harvests will limit soy’s export availability and drive edible oil buyers to turn to alternative vegoils, a vegoil analyst in Jakarta said.

Adding to palm oil’s supportive factors were growing concerns about a developing El Nino weather event that is usually associated with warmer temperatures and scant rainfall in Southeast Asia. Drought-like weather in major palm oil producers Indonesia and Malaysia, which together account for 90% of global production, could damage crops and hurt yields, tightening global vegoil supplies.

"Investors anticipate export demand [for palm oil] to rise further since the oil is now trading at a discount of $240/ton to rival soyoil" compared with a historical average [discount] of $100/ton, a trading executive in Singapore said.

Trading executives are looking to Aug. 1-25 export estimates by cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. in the next few days for demand cues.

Generally, the market has further room to move higher as it is still trading in a tight range of 3,050-3,100 ringgit.

FKLI  related news

U.S. stocks rose, paring the Standard & Poor’s 500 Index’s first weekly decline in almost two months, as Federal Reserve Chairman Ben S. Bernanke said the central bank has the ability to take additional steps to boost the economy. The euro weakened and commodities slumped.

Locally, Buyers continue to support the market when the market made some correction and strong enough for Buying force to breach the previous high last week. For today, immediate support for spot month contract is  located around 1,645 while resistance is pegged at around 1,656.

FCPO Related News

Malaysian crude palm oil futures edged off a one-month high on Thursday, as traders turned cautious over demand prospects, with the worst drought in the U.S. Midwest in 56 years pushing oilseed prices higher. (Reuters)

The benchmark November contract at Bursa Malaysia Derivatives ended down 0.6% at 3,061 ringgit a metric ton. The contract earlier rose to MYR3,100/ton, a level not seen since July 17.

Technical correction is expected after recent gains, but demand may pick up again as major cooking oil buyer China steps up imports ahead of the Mid-Autumn Festival in September.

FKLI Related News

The Dow fell more than it has since July 20, dropping 115 points, or 0.88%. It was the index’s fourth consecutive day ending in the red.

The drop may indicate a hangover from the release of Fed minutes on Wednesday, which were initially greeted with glee. On Thursday, however, St. Louis Fed President James Bullard told CNBC that those minutes are now “stale” and that the Fed may end up deciding not to act if the economy keeps improving. Weekly jobless claims also ticked up to 372,000, and data out of China showed factory output hit a nine-month low.  (Barron’s)

Asian shares retreated from a two-week high on Friday on scaled back expectations of more stimulus from the U.S. Federal Reserve and growth concerns after manufacturing surveys from the euro zone and China depicted a bleak outlook.

Brent crude pared gains on Thursday as revived hopes for more stimulus from the U.S. Federal Reserve faded and doubts about Europe's ability to address its debt crisis crept back in focus. (Reuters)

Share prices on Bursa Malaysia closed mixed yesterday after a two-day break, with the FTSE Bursa Malaysia KLCI (FBM KLCI) erasing gains after rising to a new high of 1,655.39 in morning trading.

Mercury Securities Sdn Bhd head of research Edmund Tham said there was less activity yesterday as investors are still away on holidays after the Hari Raya festival.

Meanwhile, the weak Japan July exports data and investors' cautiousness over expectations that the European Central Bank would act soon to stem the eurozone debt crisis also contributed to the market sentiment, he said. (www.btimes.com.my)

KLCI is generally expected to be in negative territory Friday as the index has been in a sideways trend, being capped by the 1655 resistance level. Todays support is around 1620.

FCPO related news

Malaysian crude palm oil futures closed at the highest in more than a month on Wednesday, chasing gains in the soybean oil market after reopening from a long weekend break and getting support from rising exports. (Reuters)

U.S. corn and soybean futures eased on Wednesday after reports of some better-than-expected yield prospects encouraged profit-taking from early week highs that stemmed from the country's worst drought in 56 years.

Cargo surveyor, Intertek Agri Services said Wednesday, Malaysia’s palm oil exports for Aug. 1-20 rose 6% from last month to 809,814 metric tons. Another surveyor, SGS (Malaysia) Bhd., will issue Aug.1-20 shipment data on Aug. 27.

Palm prices may see a temporary increase due to tight supply and strong demand before the festival season in India and China as the discount to soybean oil may boost demand. China celebrates the Mid-Autumn festival at the end of September and India’s Diwali falls in November. According to some analysts, the tropical oil is unlikely to trade above 3,200 ringgit again this year unless tensions in the Middle East spur an increase in crude oil.

Palm oil supply in the coming months  is expected to be good and is unlikely to drop below 2 million tons in August and September as output usually peaks between July and October.

A possible El Nino weather phenomenon could also lift commodity prices. A developing El Nino weather event is usually associated with limited rainfall and hot, dry weather in Southeast Asia.

FKLI related news

NEW YORK (Reuters) - The S&P 500 erased earlier losses to close flat on Wednesday after minutes from the latest Federal Reserve meeting indicated the central bank might be ready for another round of stimulus.

The Minutes from the July 31-August 1 meeting suggested the Fed is likely to deliver another round of monetary stimulus "fairly soon" unless the economy improves considerably.

Oil prices rose on Wednesday as indications the Federal Reserve is likely to provide more stimulus and a sharp drop in U.S. crude inventories countered concerns about Europe's debt crisis.

FKLI related news

NEW YORK (Reuters) - Stocks fell on Tuesday after the S&P 500 hit its highest level in four years as the benchmark index faced technical resistance and traders cashed in recent gains.

The S&P 500 index hit 1,426.68, its highest intraday rise since May 2008. Volume has been light, as expected in August, and only three of the past 12 sessions have seen moves of 0.25 percent or more by the S&P.

Stocks rose early in the session and the euro rallied to a seven-week high against the U.S. dollar, bolstered by talk that the European Central Bank will act to lower Spanish and Italian borrowing costs. Bets on action from central banks in support of their stalling economies have helped move stocks higher.

However, U.S. stocks lost momentum after the first hour as traders took profits. The slow but steady climb over the past six weeks was partly due to better-than-expected data, including payrolls, retail sales and housing numbers that countered a previous string of disappointments.

0919 GMT [Dow Jones] Malaysia shares end flat at 1649.79 after rising to a new record high of 1654.53 earlier as investors book profits on select blue chips. "Sentiment is still fairly buoyant, thanks to positive comments from the German Chancellor and expectations that major central banks will step in to aid global economy," says a local dealer; she tips the benchmark index to trade in a 1640-1655 band next week.

FCPO Related News

Malaysian crude palm oil futures rose to their highest in more than two weeks on Friday as investor optimism returned on recovering exports and a brightening outlook for the euro zone debt crisis. (Reuters)

Soybeans rallied nearly 3 percent on Tuesday to hit another peak, while corn rose nearly 2 percent on evidence of decimated crops amid the worst drought in half a century and a need to temper demand through even higher prices.

Oil prices rose on Tuesday as hopes that the European Central Bank will act to contain the region's debt crisis boosted crude futures and sent the euro to a seven-week peak versus the dollar.

FKLI related news

NEW YORK (Reuters) - Stocks fell on Tuesday after the S&P 500 hit its highest level in four years as the benchmark index faced technical resistance and traders cashed in recent gains.

The S&P 500 index hit 1,426.68, its highest intraday rise since May 2008. Volume has been light, as expected in August, and only three of the past 12 sessions have seen moves of 0.25 percent or more by the S&P.

Stocks rose early in the session and the euro rallied to a seven-week high against the U.S. dollar, bolstered by talk that the European Central Bank will act to lower Spanish and Italian borrowing costs. Bets on action from central banks in support of their stalling economies have helped move stocks higher.

However, U.S. stocks lost momentum after the first hour as traders took profits. The slow but steady climb over the past six weeks was partly due to better-than-expected data, including payrolls, retail sales and housing numbers that countered a previous string of disappointments.

0919 GMT [Dow Jones] Malaysia shares end flat at 1649.79 after rising to a new record high of 1654.53 earlier as investors book profits on select blue chips. "Sentiment is still fairly buoyant, thanks to positive comments from the German Chancellor and expectations that major central banks will step in to aid global economy," says a local dealer; she tips the benchmark index to trade in a 1640-1655 band next week.

FCPO Related News

Crude palm oil futures on Malaysia’s derivatives exchange fell to a 10-month low again Tuesday, weighed by rising stockpiles and lower soyoil values as favorable weather forecasts for the soy crop raised the prospects of improving yields.

Weather forecaster Meteorlogix said in a daily report that scattered rain and lower temperatures will aid the soybean crop in the U.S. Midwest over the next five days.

The benchmark October contract at Bursa Malaysia Derivatives ended 0.5% lower at 2,858 ringgits a ton, after falling as much as 1.8% to MYR2,820/ton, the lowest since Oct. 18.

"Sentiment is weak as investors are concerned about commodity demand amid worries about the global economy and peak palm oil production [period] in Southeast Asia," a Singapore-based trading executive at a vegoil exporting firm said. He added that investors may add short positions and drag palm oil toward MYR2,800/ton this week as export demand for the first half of August is widely expected to remain weak. Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. are scheduled to issue Aug. 1-15 export estimates Wednesday.  

However, not all are bearish on the market. Some analysts said palm oil&apos;s sizeable price discount to rival soyoil could support palm prices in the near term, while major vegoil importer India will likely build up stocks in coming weeks on weather concerns and ahead of its September-November festival season, boosting demand. "Palm oil is showing subtle signs of bottoming out, as consumer demand is slowly creeping back into the market," S. Paramalingam, executive director at Pelindung Bestari Sdn. Bhd., said.  (Dow Jones)

The palm oil export figures report on Aug 15th will be watched as further correction is likely to occur if the export figures continue to deteriorate. For today, pivot support level for the benchmark Oct is located around 2,806 while resistance is pegged at 2,872.

FKLI Related News

Wall Street stocks ended little changed on Tuesday after early gains supported by stronger-than-expected U.S. retail sales numbers faded, while oil prices rose on tepid growth data in Europe that underpinned hopes for fresh  monetary stimulus.

Both Home Depot's earnings and the retail data, which showed retail sales rose for the first time in four months, come after recent housing and jobs numbers lifted hopes that a slowdown in the economy may only be temporary.

Asian markets rose Tuesday as investors continued to hope global central banks will provide stimulus to support growth, with Hong Kong stocks extending gains in afternoon trading in response to better-than-expected economic data from Europe.

The Dow Jones industrial average gained 37.28 points, or 0.28 percent, to 13,206.71. The Standard & Poor's 500 Index rose 4.40 points, or 0.31 percent, to 1,408.51. The Nasdaq Composite Index added 10.27 points, or 0.34 percent, to 3,032.79.

The KLCI ended Tuesday up 0.4% at a record high of 1652.90. Today’s Support is around 1647 and Resistance is around 1655.

FKLI Related News

NEW YORK (MarketWatch) — U.S. stocks erased Friday losses to tally their fifth week of gains, sending the S&P 500 to a four-month high, with disappointing Chinese trade data advancing hopes for further moves to bolster the global economy.

After a 70-point drop, the Dow Jones Industrial Average ended up 42.76 points, or 0.3%, at 13,207.95, led by Hewlett-Packard Co.

FCPO Related News

Malaysian crude palm oil futures ended off an 8-week low on Friday, and posted a fifth straight weekly loss with traders positioning ahead of a key report by the U.S. Department of Agriculture (USDA) later in the day. FCPO October contract reached a low of  2844 but swiftly recovered to 2882 by Friday's close.

Soybean futures on the Chicago Board of Trade rose for a third day after the U.S. Department of Agriculture slashed its forecasts of U.S. 2012/13 soy production and ending stocks, traders said. However, gains were limited by profit-taking and a fall in corn and wheat futures. Continued export demand from China also added support. USDA said private exporters sold 290,000 tonnes of U.S. soybeans to China for 2012/2013 delivery.

However, weather maps have turned more favourable next week which could help soybean conditions in the Corn Belt. A cooler and wetter pattern this week and next could relieve stress for much of the Midwest. A Kuala Lumpur-based trader added that prices could rebound to 3,200 in the coming weeks due to persistent weather-related supply risks to the U.S. Midwest soybean crop.  

Intertek data this morning were slightly bearish but SGS export numbers released Friday afternoon helped improve market sentiment, traders said. Malaysia's Aug 1-10 palm oil exports exports fell 1.8% from a month earlier to 357,372 tons while SGS data put Aug 1-10 exports at 354,614 tons, up 6.8% from the July 1-10 period. 

Malaysia's July palm oil exports fell 15% to 1.30 million tons, the Malaysian Palm Oil Board said Friday. July crude palm oil output rose 15% from June to 1.69 million tons while end-July palm oil stocks rose 18% from end- June to 2 million tons, the highest level since February, MPOB data showed.

Today's support is located around 2850 while resistance is pegged at 2914.

FCPO Related News

Malaysian crude palm oil futures recovered a little on Thursday from a near 8-week low hit the previous day, although traders remained cautious ahead of a slew of key industry reports that could stir more market volatility. (Reuters)

The industry data is due Friday but gains were capped by expectations that data will show that palm oil inventory levels in Jyly had risen to 1.88 to 2 million metric tons from 1.70 million in June due to low demand. July crop data by industry regulator, the Malaysian Palm Oil Board is also due Friday.

The key U.S. government report is expected to slash production estimates due to damage from the worst drought in 56 years. Oil futures rose on Thursday, with Brent gaining for the fifth straight session, lifted by stronger-than-expected economic data from the United States, a lower outlook for North Sea Brent production and persistent hopes for economic stimulus.

Further gains in the palm oil market will likely depend on unfavourable weather, where a developing El Nino weather event that is usually associated with warmer temperatures and limited rainfall could affect Palm Oil production in South East Asia.

FKLI October opened at 2,861 this morning, reached a high of 2874, but dropped sharply to 2847 by mid-day. For today, immediate support is located around 2,863 followed by 2,830 while resistance is pegged at 2,920.

FKLI Related News

The stock market languished on Thursday. Stocks darted between small gains and losses without much conviction either way.  The Dow Jones industrial average fell 10.45 points, or 0.08 percent, to 13,165.19. The Standard & Poor's 500 rose 0.58 points, or 0.04 percent, to 1,402.80. (Associated Press)

Malaysia’s shares ended higher Thursday on easing inflation in China which could give room for interest rate cut to further spur growth and on hopes for further action by European Central Bank to boost the global economy.  

FKLI August opened at 1639.5 this morning and closed lower at 1637.5 for the first session. Resistance is at around 1645.

FKLI related news

NEW YORK, Aug 8 (Reuters) - The Standard & Poor's 500 just barely extended a streak of gains to a fourth day on Wednesday, ending above 1,400 in another thinly traded session.
Expectations for stimulus from the European Central Bank and the U.S. Federal Reserve triggered the recent gains, but investors found little reason to keep pushing stocks higher after driving the market to three-month highs.

The FBM KLCI closed higher on Wednesday but its gains were capped as regional markets mostly paused while European markets retreated.

On the local front, Fitch Ratings said Malaysia faced rising negative fiscal pressures that may eventually offset existing credit strengths unless structural weaknesses in the public finances are addressed. In a report published on Wednesday, Fitch said Malaysia's trade openness and existing relatively high public debt stock would leave its credit profile exposed to a potentially sharp increase in public debt ratios in the event of an interest rate or growth shock, although this is not the agency's base case.

FKLI opened at 1639 yesterday and closed lower at 1635. Immediate Resistance was expected around 1645 yesterday.

FCPO related news

Malaysian crude palm oil touched its lowest in more than a week on Tuesday, as traders priced in wetter weather in the U.S. Midwest that eased concerns about further damage to new-crop oilseed supplies. (Reuters)

U.S. corn and soybean futures reversed course to end lower on Tuesday as investors took profits on updated weather forecasts for more rainfall in the Midwest farm belt, and on selling ahead of Friday's key government crop report detailing drought damage. Temperatures are expected to be cooler late this week  but may return to heat next week.

Some of the late-planted U.S soybean crop would benefit from the late summer turn to improved weather conditions. However, the ratings for each remained the worst since 1988 as the heat and dryness largely affected crop prospects. Tight global supplies mean soybean futures contracts have limited potential to fall up to January 2013 although they face temporary selling pressure after touching record levels, Hamburg-based oilseed analysts Oil World said on Tuesday. Oil prices jumped to a 12-week peak on Tuesday as falling North Sea output, support for more bond buying by the U.S. Federal Reserve and Middle East tensions lifted crude futures to a third straight higher settlement. 

With the market travelling sideways for at least 4 trading days, this is an indication of forthcoming explosive breakout which is likely to be downside . To achieve this, the benchmark August need to breach below previous low or major support level around 2,880 level. FCPO October contract closed sharply lower yesterday at 2,863.