April 30 (Bloomberg) — Rubber headed for its worst monthly performance since September as most investors unwound positions before holidays in Japan next week amid speculation that supply will improve as the annual low-output season ends.

Futures in Tokyo fell as much as 1.3 percent to 301.7 yen a kilogram ($3,211 a metric ton) after rising as much as 1.3 percent earlier. The most-active contract dropped for a third day, extending April’s loss to 2.1 percent.

“There will be position-squaring by investors ahead of the long holidays,” said Hiroyuki Kikukawa, general manager of research at Tokyo-based IDO Securities Co.

The Tokyo rubber futures market, which was closed yesterday for a public holiday, will be closed from May 3 to May 5 for the Golden Week holiday and resume trading on May 6.

Supply in key producing countries is expected to improve as the wintering season, when trees shed leaves and latex output slows, typically finishes at the end of April. “Supply will slowly improve,” said Felix Yeo, a trading manager at the Singapore unit of Marubeni Corp.

October-delivery rubber, the most-active contract on the Tokyo Commodity Exchange, declined 1.3 percent to 301.9 yen per kilogram as of 12:55 p.m. Singapore time.

Rubber futures have gained 9.5 percent this year and reached a 21-month high of 338.5 yen on April 16 as the global economy recovered from the worst postwar recession, boosting raw material demand. The market was also supported by a seasonal decrease in supply from Thailand, Malaysia and Indonesia, the three biggest producers.

The free-on-board price, which excludes freight and insurance, of Thai RSS-3 grade rubber for May delivery remained unchanged at 129.55 baht ($4.01) per kilogram today, according to the Rubber Institute of Thailand. It touched a record 130.55 baht on April 28.

September-delivery rubber on the Shanghai Futures Exchange declined 0.6 percent to 23,295 yuan ($3,412) a ton.

Source: Bloomberg

[Dow Jones] Physical prices of Thai USS3 rubber steady at THB111-THB116.33/kg vs THB111.5-THB115.81/kg yesterday as supplies tight, total arrivals still below 10 tons even though tapping has resumed. Outside central markets, factories paying around THB116/kg. “USS3 prices are down from their peak but they are still high; hopefully we will see output and prices easing soon,” says Phuket-based exporter. Total quantity sold in three central markets of Thailand estimated at 8.9 tons versus 7.5 tons yesterday: 2.2 tons in Hat Yai, 3.2 tons in Surat Thani, 3.5 tons in Chandee.

Source: Dow Jones

[Dow Jones]–Natural rubber futures on Shanghai Futures Exchange settle slightly higher despite giving up early gains in late afternoon session, mainly helped by overnight rebound in crude oil, higher metals futures, says Orient Securities Futures analyst He Jing; adds natural rubber may consolidate over next few sessions with upward bias, “especially because the ANRPC report lifted market sentiment.” Association of Natural Rubber Producing Countries says supplies of natural rubber are expected to rise as wintering season comes to an end, but pent-up demand, a faster-than-expected economic recovery could keep market tight in coming months. Tips natural rubber in CNY23,000-CNY24,000/ton range based on charts. Benchmark September contract settles up CNY90 or 0.4% at CNY23,475/ton.

Source: Dow Jones

Market Talk items on Tocom rubber won”t be available Thursday as the exchange is closed for a national holiday. The items will resume Friday.

Source: Dow Jones

TOKYO, April 28 (Reuters) – Key Tokyo rubber futures fell across the board on Wednesday as weakness in oil and a higher yen dampened sentiment, encouraging investors to take profits from recent gains.
* The key Tokyo Commodity Exchange rubber contract for October delivery <0#JRU:> fell 6 yen or nearly 2 percent to settle at 305.8 yen per kg, the lowest benchmark close in about a month.
* Oil fell again on Wednesday to below $82 a barrel, taking losses this week to more than 3 percent, after a surge in U.S. crude inventories fed negative sentiment following the downgrade of credit ratings for Greece and Portugal. [O/R]
* The euro hit a one-year low against the dollar on Wednesday and was seen likely to weaken further, after downgrades of Greece and Portugal’s credit ratings raised fears that the euro zone’s debt problems are spreading. [USD/]
* The yen trimmed earlier gains against the dollar. A higher yen weighs on yen-priced Tokyo rubber futures.
* The fall in the nearby contract, the May spot contract was limited as the problem of delays in cargoes to deliver through TOCOM kept upward pressure on prices.
* Asian physical rubber prices were unchanged around recent firm levels on Wednesday as tight supply offset falls in futures contract prices on the Tokyo Commodity Exchange. [ID:nSGE63R020]
* China sold 30,000 tonnes of natural rubber from state reserves in open bidding last week, the National Development and Reform Commission said on Tuesday. The rubber was bought by 26 companies at prices between 23,600-24,840 yuan ($3,457-$3,639) per tonne, the commission said. [ID:nTOE63Q01O]
* Japan’s Nikkei average slid 2.6 percent on Wednesday, dragged down by exporters such as Kyocera <6971.T> on worries over the euro zone’s debt problems. [.T]

Source: Reuters