Rubber advanced to the highest level in more than two weeks on speculation that demand may climb as Asian equity markets gained and the Japanese currency declined.

Futures climbed as much as 2.8 percent to 270.8 yen per kilogram ($3,082 a metric ton), the highest level since July 12, as the MSCI Asia Pacific Index rose for a fourth day on optimism that corporate earnings may improve.

“Rallies across the Asian markets spilled over to commodities, including rubber,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co.

January-delivery rubber settled at 268.6 yen per kilogram on the Tokyo Commodity Exchange. November-delivery rubber on the Shanghai Futures Exchange rose 3.1 percent to 22,875 yuan ($3,374) a ton.

“A weaker yen supported the rubber market,” Kazunori Kokubo, general manager of the international business department at commodity broker Yutaka Shoji Co., said by phone from Tokyo.

The currency weakened to 88.08 against the dollar from 87.90 yesterday, making the yen-denominated rubber contract more attractive for holders of other currencies.

Prices also climbed on speculation that low stockpile levels in China and Japan may prompt buyers to replenish inventories, Kokubo said.

Short Positions

“Warehouse stock in Japan is still very low and investors who hold short positions are worried about higher prices, prompting them to cover,” Kokubo said, referring to bets that prices would fall.

Data from the Tokyo exchange showed last week that natural- rubber stockpiles monitored by the bourse dropped 29 percent to 1,341 tons as of July 10. That’s the lowest level since at least 2001, according to exchange spokesman Seiki Ichimura.

Natural-rubber stockpiles in China decreased 2,046 tons to 19,328 tons, based on a survey of 10 warehouses in Shanghai, Shandong, Yunnan, Hainan and Tianjin, the Shanghai Futures Exchange said on July 23.

Cash prices advanced, tracking gains on the Tokyo market, and as heavy rains in southern Thailand may limit supply, the Rubber Research Institute of Thailand said on its website today. The price added 0.2 percent to 102.40 baht ($3.18) per kilogram.

Source: Bloomberg

[Dow Jones] Asian physical rubber prices steady, with some buyers on sidelines–awaiting stronger cues later this week, says Phuket-based trader. Thailand”s RSS3 sold at $3,180/ton, CIF, for August shipment to China; STR20 CV traded at $3,070/ton, FOB, for September shipment. Indonesia”s SIR20 sold at around $2,940/ton, FOB, for October shipment. Malaysia”s SMR20 changed hands at $2,965/ton, FOB, for October shipment.

Source: Dow Jones

[Dow Jones] Tocom rubber futures settle higher as yen”s gains ease, crude rallied overnight; Shanghai rubber supports. Tocom July spot contract surges, settles Y40 or 11.2% higher at Y397.2/kg as investors cover short positions ahead of contract”s expiry Monday; although Thai production increasing, Japan”s rubber stocks low, August contract may also see similar short covering near expiry next month, says Tokyo-based Kaname Gokon, deputy general manager at commodity brokerage Okato Shoji Co.”s research division. August to December contracts post smaller price increases below Y10 at settlement; forward contracts likely to move sideways next week; overall volumes thin recently as investors on sidelines, unwilling to sell short as inventory levels low in Japan, also not willing to set up long positions as expecting Thai production to increase, yen weighs, adds Gokon. Benchmark December rubber contract settles Y8.3 or 3.2% higher at Y265.6/kg, near intraday high of Y266.2/kg.

Source: Dow Jones

[Dow Jones] Tocom rubber futures settle 2.4% lower after dipping to week-low of Y256.7/kg as yen hits week-high against dollar after Fed Chairman Bernanke”s downbeat assessment of U.S. economic outlook; crude also down. Only spot July contract up; on short covering. Strong yen weighs on Tocom, which may see further long liquidation if currency continues to gain, says Tokyo-based analyst. Yen may strengthen even more, say currency traders. Benchmark December rubber contract settles Y6.2 lower at Y257.3/kg.

Source: Dow Jones

Rubber retreated for the first time in three days as a strengthening Japanese currency reduced the appeal of the commodity used to make tires.

The most-active contract in Tokyo lost as much as 1.1 percent after gaining 0.8 percent in the past two sessions. The yen gained versus 15 of its 16 major counterparts as concern over the health of European banks and the pace of the U.S. economic recovery boosted demand for the currency as a refuge.

The decline was limited because of optimism that demand may grow, as stockpiles in Japan and China are at low levels, said Avtar Sandu, Asian Commodities Manager at Phillip Futures Pte.

Natural-rubber stockpiles monitored by the Tokyo exchange dropped by 29 percent to 1,341 metric tons as of July 10, data from the bourse showed yesterday. It was the lowest volume since at least 2001, said exchange spokesman Seiki Ichimura. Data before that year were unavailable, he said.

December-delivery rubber fell as much as 2.8 yen to 261.7 yen per kilogram ($3,002 a ton) before settling at 263.5 yen on the Tokyo Commodity Exchange. July-delivery rubber gained 2.2 percent to 352 yen, after declining 3 percent yesterday.

“Investors are optimistic Chinese and Japanese buyers will soon build up their depleting stockpiles,” said Chaiwat Muenmee, an analyst at Bangkok-based commodity broker DS Futures Co.

“Rainfall in southern Thailand may limit supply availability, providing support to rubber prices,” said Chaiwat. Limited supply and a low level of stockpiles may make physical delivery difficult at the expiry of the July contract.

Natural-rubber inventories in China have slumped 64 percent this year to 21,374 tons, according to Bloomberg data.

November-delivery rubber on the Shanghai Futures Exchange was little changed at 21,720 yuan ($3,204) a ton.

The cash price was quoted at 104.65 baht a kilogram, unchanged from yesterday, the Rubber Research Institute of Thailand said on its website.

Source: Bloomberg