TOKYO, July 22 (Reuters) – Key Tokyo rubber futures eked out a small gain on Wednesday thanks to steady oil prices, but the market was capped as investors took profits after prices rose to their highest in more than two months the previous day.
* The key Tokyo Commodity Exchange rubber contract for December delivery <0#JRU:> settled at 174.8 yen per kg, up 0.2 yen from the previous settlement. It rose as high as 177.2 yen, just shy of 177.4 yen hit on Tuesday, the highest for a benchmark since May 11.
* The key contract has settled up for a sixth session, the longest winning streak since early April.
* An analyst at a Japanese securities firm said there was firm resistance at 180 yen, a level the market has failed to break above since November.
* “The 180 yen level is forming a cap, and as demand remains weak, producers’ curbing output is only serving to provide the market with support rather than driving it higher,” he said.
* Thai rubber exports fell 4.7 percent in June from a year earlier, due in part to limited supply because of rain in growing areas, traders and officials said on Tuesday. The fall in exports was also due partly to a plan agreed by the top three rubber-producing countries — Thailand, Indonesia and Malaysia — to cut exports by 915,000 tonnes in 2009 to prop up prices, dealers said. [ID:nBKK466099]
* There are expectations that demand in China may recover due to the government’s stimulus measures and prompt producers to lift their output curbs, traders said.
* “For the time being rubber, like other commodities, will likely drift sideways as liquidity falls for the summer and players wait for more clues for a clearer economic outlook and determine market direction,” the analyst said, expecting rubber prices to trade between 150-170 yen.
* The rubber market recouped earlier losses as oil prices recovered from an earlier low below $65 a barrel to hover just above $65 on Wednesday. [O/R]
* The yen rose against major currencies on Wednesday after Federal Reserve Chairman Ben Bernanke’s cautious view on the U.S. economy prompted investors to pare their risk appetite. [USD/]
* A higher yen deflates yen-based commodity futures prices and weighs on market sentiment.

Source: Reuters

[Dow Jones] Physical prices of Thai USS3 rubber up as heavy rain continues to hamper tapping work in key southern producing regions, while farmers continue to hold onto what little stock they have amid general sentiment that prices will rise even further in coming days, says trader in Phuket. Adds buyers quiet, however, with price disparity between Thai grades and cheaper SIR20, SMR20 deterring interest in Thai rubber. Thai USS3 traded on Hat Yai Central Market at THB58.46/kg vs THB58.13/kg yesterday. (ANJ)

Source: Dow Jones

[Dow Jones] Tocom rubber futures settle marginally higher. Recent steadier crude oil prices, tight physical supply due to rain-induced delays to plantation work in southern Thailand continue to lend mild support, though market may need further catalyst for any push much higher in near term, observers say. However, December contract did test, break above, widely regarded technical resistance at Y177/kg today – rising briefly to intraday high of Y177.2/kg – while sustained break above that level tomorrow to pave way for test of next upside target at Y179/kg, says trader in Singapore. Adds immediate support likely at Y170/kg – though market will continue to be heavily influenced by external factors. Benchmark December RSS3 contract settles Y0.4 higher at Y175/kg. (ANJ)

Source: Dow Jones

TOKYO, July 21 (Reuters) – Key Tokyo rubber futures hit their highest in more than two months on Tuesday on the back of firm oil prices, extending gains into a fifth session and marking the longest winning streak since early April.
* The key Tokyo Commodity Exchange rubber contract for December delivery <0#JRU:> rose to 177.4 yen per kg, the highest for a benchmark since May 11.
* The key contract settled at 174.6 yen, up 3.5 yen or 2 percent and taking its gains over the five sessions to 14 percent. Tokyo markets were closed on Monday for a national holiday.
* The TOCOM market has failed to break above 180 yen this year due to limited demand as automobile output remains low because of the economic slump. It last stood above 180 yen in November last year.
* In April, the TOCOM market rose for six sessions in a row to clear the 170 level, and later touched a year-to-date high of 179.7 yen.
* But a stock market rally and solid economic growth in China have increased hopes for a global recovery, lending support to commodities generally.
* “Buying by fund managers from the higher end of 150-160 yen has driven the TOCOM market higher. But their buying looks to be running out of steam now they have piled up long positions,” said a manager at a commodity brokerage in Tokyo.
* The Shanghai rubber futures market <0#SNR:> fell on Tuesday, snapping a five-day rising streak and capping further gains in Tokyo, traders said.
* On Monday the most active contract on Shanghai futures rallied to its strongest since October.
* “Buying by fund managers may restart if and when the TOCOM market tests an upside and clears the 180 yen level. But chances look slim for now,” the manager said.
* U.S. crude futures held onto recent gains on Tuesday as optimism over a global economic recovery sparked a rally in equity markets and a drop in the dollar. Attention is turning to the release of weekly U.S. inventory data later in the day to gauge whether talk of economic recovery is translating into real demand in the world’s top energy consumer. [O/R]
* Japan’s Nikkei share average <.N225> climbed 2.7 percent to its highest close in two weeks as optimism grew about a recovery in the U.S. economy, reviving investor appetite for riskier assets and lifting blue-chip exporters such as Canon Inc <7751.T>. [.T]
* U.S. stocks jumped on Monday, driving the S&P 500 to an eight-month closing high, after CIT Group Inc was thrown a lifeline to avoid bankruptcy, and investors bet corporate America would log another strong set of earnings this week. [.N]
* In the currency market, the dollar inched off the steepest of the week’s lows on Tuesday as the market awaited congressional testimony by Federal Reserve Chairman Ben Bernanke. [USD/]
* Against the yen, the dollar fell 0.3 percent to 93.90 yen , paring recent gains and nearing toward a five-month low below 92 yen hit earlier this month.
* A recent fall in the yen has fuelled investor appetite as it inflates yen-based commodity futures prices.

Source: Reuters

July 21 (Bloomberg) — Rubber jumped by as much as 4.1 percent to the highest in 10 weeks amid optimism the global economy may be recovering, increasing raw material demand.

Futures in Tokyo advanced to the highest since May 11, extending last week’s 8.3 percent gain. Asian stocks climbed after Goldman Sachs Group Inc. raised its estimate for the U.S. Standard & Poor’s 500 Index on improving earnings, and a gauge of economic indicators increased in June.

“Investors bought rubber futures on optimism an economic recovery will boost demand,” Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co., said today by phone.

Natural rubber for December delivery, the most-active contract, gained 2.4 percent to settle at 174.6 yen a kilogram ($1,858 a metric ton) on the Tokyo Commodity Exchange. Earlier, the price rose as much as 6.9 yen to 177.4 yen.

The MSCI Asia Pacific Index added 1.4 percent to 106.25 as of 4:04 p.m. Tokyo time, headed for a sixth straight gain.

The Conference Board’s gauge of the U.S. economic outlook for the next three to six months increased 0.7 percent, more than forecast, after a revised 1.3 percent gain in May, the New York-based research group said yesterday. It is the first time the index has climbed for three consecutive months since 2004.

Chinese Demand

Rubber futures also advanced on speculation that China, the world’s largest consumer, may step up purchases to meet growing demand from tiremakers, Shigemoto said.

China’s sales of cars and other passenger vehicles surged 48 percent to 872,900 last month, the China Association of Automobile Manufacturers said on July 9. That was the biggest jump since February 2006 as government stimulus spending spurred a revival in the world’s third-largest economy.

Rubber inventories monitored by the Shanghai Futures Exchange rose 3,275 tons to 46,795 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the bourse said July 17.

“It appears China was restocking the raw material to raise tire output,” Shigemoto said. “Chinese demand may tighten rubber supply as producers continue export curbs.”

Thailand, Indonesia and Malaysia will reduce shipments by as much as 48,000 tons a month in the second half, Abdul Rasip Latiff, chief executive officer of the International Rubber Consortium Ltd., said July 15. The trio cut exports by 540,000 tons in the first five months of the year, more than the 414,000 ton reduction planned for the first half, he said.

Rubber for November delivery on the Shanghai Futures Exchange, the most-active contract, lost 1 percent to 16,490 yuan ($2,414) a ton.

Source: Bloomberg