BANGKOK, Feb 24 (Reuters) – Tokyo rubber futures edged higher
on Wednesday, supported by the recent rise in oil prices and
tight supply on the physical market, but a stronger Japanese yen
capped the gains, dealers said.
* The benchmark rubber contract on the Tokyo Commodity
Exchange <0#JRU:> for August delivery rose 0.7 yen to settle at
301.5 yen ($3.34) per kg.
* Dealers said TOCOM rubber was likely to remain firm.
Falling supply in Thailand, the world’s biggest rubber producer
and exporter, was expected to hold cash rubber prices above $3.0
per kg for some months, traders said. [ID:nSGE61M05N]
* Oil edged above $79 a barrel on Wednesday after
industry data showed an unexpected fall in U.S. crude inventories
last week, in contrast to analysts’ forecasts for a stock build.
[O/R]
* “Fundamental factors could provide support to TOCOM rubber
for some weeks from now, but other factors, such as the yen,
still weighed on prices,” a Japanese dealer said.
* The yen held on to hefty gains, aided by safe-haven inflows
as the investor mood darkened considerably on doubts about the
pace of the global economic recovery. [USD/]
* Dealers said they expected TOCOM price to rise further on
Thursday as technical sentiment improved after prices finished
above the key psychological level of 300 yen per kg.
($1=90.21 Yen)

Source: Reuters

BANGKOK, Feb 23 (Reuters) – Cash rubber prices are expected to stay above $3.0 per kg and near a 58-year high over the next few months, supported by strong demand at a time of the year when supply is normally tight, traders said on Tuesday.
Benchmark Thai rubber sheet (RSS3) was quoted at $3.25 per kg on Tuesday after hitting $3.27 per kg on Monday, the highest level since 1952.
“The rubber price should remain high for at least two months. It’s unlikely to fall below $3.0 per kg as supply will be tighter,” said a trader at Thailand’s Hat Yai rubber centre.
Traders said demand remained strong as major tyre makers, including Chinese, were buying to replenish stocks and run their operations.
“Bridgestone bought RSS3 at $3.22 per kg for prompt shipment and others are still buying. They aren’t buying in very big lots, but they keep buying,” said a trader in Singapore.
Traders said supply was likely to fall short of demand as Thailand, the world’s biggest rubber producer and exporter, was about to enter its dry season when rubber trees stop producing latex.
Trees in the south, Thailand’s major rubber-producing area, which produces around 90 percent of its annual production of 3 million tonnes, have shed their leaves and are gradually ceasing to produce latex, said a southern agricultural official.
“Output has fallen roughly 50 percent as rubber trees produce less and less latex,” he said, adding that production would stop completely by mid-March when farmers stopped tapping.
Rubber trees usually take one month to rejuvenate and produce latex again.
Traders and farmers were concerned about the effects of an El Nino pattern that could bring a prolonged dry season this year.
The Meteorological Department has warned extremely high temperatures of around 33 to 36 degrees Celsius (91-97 Fahrenheit) could hit the rubber region during March and April.
Farmers normally resume tapping at the end of the dry season, around mid-April, when rubber trees grow new leaves and start producing latex.
Meteorologists also warned of thunder storms in early May that could disrupt tapping.
“If heavy rains hit the southern region in early May, we would have a longer period of tight supply as farmers won’t be able to tap as normal,” said a farmer in Patthalung province, one of the key rubber areas in the south.

Source: Reuters

[Dow Jones] Physical prices of Thai USS3 rubber rise to THB99.55-THB100.19/kg vs THB99.29-THB100.11/kg yesterday. Outside central market, factories paying around THB100/kg. “We don”t think we can sell our processed rubber at prices that are higher than yesterday, so we are not willing to pay much more,” Thailand-based factory executive says; adds physical processed rubber prices today expected to fall, tracking Tocom rubber futures. Tocom new benchmark August contract trading Y300.6, down Y1.9 from yesterday”s benchmark settlement. However, RSS3 prices still holding up as supplies fall due to wintering season. Total quantity sold in three central markets of Thailand estimated at 167.6 tons versus 216.6 tons yesterday: 59.6 tons in Hat Yai, 43 tons in Surat Thani, 65 tons in Chandee. (HLN)

Source: Dow Jones

Feb. 23 (Bloomberg) — Rubber retreated from a one-month high as a drop in oil reduces the competitiveness of the commodity against its rival synthetic products, and a strong Japanese currency weakened the appeal of yen-based contracts.

Futures in Tokyo fell for the third time in four days, losing as much as 2.2 percent. The price reached the highest level since Jan. 21 yesterday, nearing this year’s peak of 306 yen per kilogram ($3,360 a metric ton) on Jan. 15.

Crude oil dropped for the first time in six days on speculation fuel supplies in the U.S. increased, a sign demand from the world’s biggest energy consumer may be slowing. The yen advanced as concern over Greece’s fiscal future and the pace of the Fed’s stimulus withdrawal increased demand for Japan’s currency as a refuge.

“Rubber declined as it lost support from the currency and energy markets,” said Hisaaki Tasaka, an analyst at Tokyo-based commodity broker ACE Koeki Co., said today by phone. Still, “losses were limited as cash rubber prices gained on good demand and tightening supply.”

Rubber for July delivery lost as much as 6.5 yen to 296 yen per kilogram before settling at 299 yen on the Tokyo Commodity Exchange. August-delivery rubber, listed on the bourse today, surged 5.1 percent to settle at 300.8 yen.

In the cash market, shippers in Thailand, the top producer and exporter, raised offers for RSS-3 grade rubber for April shipment to $3.27 a kilogram from $3.20 yesterday, Tasaka said.

Chinese Demand

“Physical prices increased as Chinese buyers returned to the market after the Lunar New Year holiday,” Tasaka said. “Exporters also raised offers on expectations supply will decrease seasonally over the next few months.”

Rubber trees shed leaves and latex output slows during wintering, or the low-production season, that normally begins in Thailand’s main growing areas in February.

May-delivery rubber on the Shanghai Futures Exchange lost 0.6 percent to settle at 24,855 yuan ($3,639) a ton. It rose to 25,380 yuan yesterday, the highest since Jan. 21, as trade resumed after a week-long Lunar New Year holiday.

Benchmark Thai rubber prices continued rising as buyers accelerate purchases before the low-production season, the Rubber Research Institute of Thailand said on its Web site today.

The price of unsmoked sheets gained 0.2 percent to 99.99 baht ($3.02) per kilogram. Ribbed smoked sheets rose 0.8 percent to 104.29 baht a kilogram, according to the organization.

“Strong demand from China and concerns over declining rubber production continue to support Thai prices,” Navarat Kaewpratarn, senior marketing official at Future Agri Trade Co., said by phone from Bangkok.

Crude oil for April delivery lost as much as 0.5 percent to $79.73 a barrel in electronic trading on the New York Mercantile Exchange, before trading at $80.09.

The yen strengthened to 90.91 per dollar at 4:35 p.m. in Singapore from 91.14 in New York yesterday, when the currency advanced 0.4 percent.

Source: Bloomberg

[Dow Jones] Tocom RSS rubber futures settle at one-month high, tracking Shanghai rubber futures; buyers set up long positions, sellers covered. Shanghai rubber futures up more than more than 4% after weeklong holiday closure. Higher crude, gold, stock markets provide support for Tocom rubber, traders say. U.S. Fed”s decision to raise discount rate being seen in positive light, contrasting with earlier concerns about monetary tightening, making for optimism across asset classes. Nymex light, sweet crude for March delivery trading 20 cents higher at $80.01/bbl on Globex after 1% overnight rise. Spot gold trading $7.30 higher at $1124.40/oz. More upside expected for Tocom rubber after close above key Y300 support, traders say. Analyst puts technical resistance at Y306. Benchmark Tocom July contract settles Y7.9 higher at Y302.5/kg, near intraday high of Y302.7/kg. (HLN)

Source: Dow Jones