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TOKYO, June 24 (Reuters) – Key Tokyo rubber futures fell towards 150 yen on Wednesday and hit a three-month low on a decline in crude oil prices.
The key Tokyo Commodity Exchange rubber contract for November delivery <0#JRU:> settled at 152.1 yen per kg, down 0.8 yen or 0.5 percent from the previous day, after hitting a low of 150.5 yen, the lowest for a benchmark contract since March 31.
But prices were in a narrow 4-yen range.
After the benchmark fell below 160 yen earlier this week, the market broke an uptrend in technical charts, prompting funds and investors to unwind their long positions, said a dealer at a Japanese commodity trading firm.
“Funds have been closing out their long positions after their attempt to push prices above key resistance failed, as consumers didn’t follow through with buying due to weak demand,” he said.
“At the same time, buyers have emerged as prices fell, suggesting prices may not fall too far despite the weak technical charts,” the dealer said.
Reflecting doubts about the global economic recovery, commodities across the board, including oil, have been falling.
U.S. crude fell more than $1 per barrel to near $68 on Wednesday after industry data showed a lower-than-expected decline in U.S. crude stocks and a higher-than-expected build in gasoline supplies. [O/R]
Investors were watching the outcome of the Federal Reserve’s two-day policy meeting that ends later on Wednesday for the central bank’s comments on the economic outlook, traders said.
The dollar hovered at its lowest levels for a week against the euro on Wednesday after tumbling sharply across the board as the market readied for the Fed to dampen expectations for higher interest rates. [USD/]
Weaker demand has eroded exports from Thailand, the world’s largest rubber producer. Thai rubber exports fell 19.6 percent in May from a year earlier due to limited supply, in part due to government policy and the sluggish car industry. [ID:nBKK139758]
Malaysian private rubber estates have shrunk 82 percent to 61,000 hectares over nearly 20 years, a senior Malaysian minister said. [ID:nKLR371516]
Source: Reuters