Tokyo rubber may remain sideways, due to weak Yen and strong crude oil. The April futures have immediate resistance at 357.40 and 359.10. If it can break 360 mark with volumes then it may even move up towards 365.90. Support at 355.40 and 354.70. Chinese move to increase margins and daily price limit can cause huge bull liquidation and volatility back into the market.
Domestic Market
In the domestic market natural rubber December have support at 199.11 and 198.81. If it trades below more selling is expected. Heavy showers and landslides will support the natural rubber prices to a certain extent; because of this arrivals are very little. Resistance for the natural rubber will be at 200.61 and 201.50. Expect a sideways trend rather than a firm trend.
Analysis of Tokyo Rubber Market
The market fell sharply to the low of 351.7 yen and closed the session at 355.2 yen, loosing 7.5 yen, on a continuous loss in Shanghai rubber market for three days in a row. Following the night session, finished lower by 3.4 yen at 359.3 yen due to weakened oil prices and Shanghai rubber market yesterday after TOCOM closed, the day session resumed trading slightly higher at 359.8 yen on rebounded oil prices and bullish other commodity markets, and it gradually rose as high as 362.8 yen after opening in order to fill the gap with previous day session close.
But it lost ground to the low, at that time, of 355.1 yen as Shanghai rubber market plunged below 31,000 yuan and reached to limit down, 30,375 yuan, and the price ranged around 356 yen level afterward. Furthermore, due to declined oil prices and weaker Shanghai rubber market,stayed at limit down in the afternoon session, the price fell even more to trigger Circuit Breaker and enewed the day’s low at 351.7 yen. Massive selling did not last long and the market rebounded toward closing.
The Shanghai rubber market moved downwardly from opening and mostly stayed at limit down throughout the session, finally closed at 30,375 yuan with a loss of 1,600 yuan. Since the spread between TOCOM and SHFE narrowed quickly in these 2 weeks, selling pressure could be strengthened by arbitragers, thus, selling momentum could last little more while.
The market showed backwardation with a spread of about 1.7 yen in two forward contracts, meaning that rolling over by short position holders remained active compared to the activity by long position holders. It would be changing to contango market as funds start to roll their long position.
Rubber News
Rubber slumped as China, the largest user, will raise commodity futures margins to cool prices and as growers in Indonesia, the second-biggest exporter, boost output to benefit from record prices. May-delivery rubber on the Tokyo Commodity Exchange fell as much as 3 percent to 351.7 yen per kilogram ($4,191 a metric ton) before settling at 355.2 yen. The most-active contract, which reached a 30-year high of 383 yen on Nov. 11, is set for the worst weekly loss since July 2.
Futures in Shanghai tumbled by the daily limit to the lowest level since Oct. 13. Tokyo opened today with negative trend. Today though all contracts opened above the previous day’s close, soon the prices declined to as low as 352.8 yen. January and February contracts are trading with the highest loss for the day of 2.1 yen.
Most active May deliveries rose up to 357.2 yen and are currently trading at 354.4 yen making minor loss of 0.8 yen. Shanghai was closed on 26th with negative trend, all contracts making losses. Today also the March deliveries are trading with losses. The rubber stock with Shanghai Futures Exchange dropped by 90 tons and the current holding is 48265 tons.
In Thai market RSS 3 rubber futures June and July are trading with losses 1.10 baht per kg. There are no quotes for the contract at 9.28 IST.
AUTO SECTOR NEWS
Saab will sell about 25,000 vehicles this year as “sales are slumping,”Focus magazine reported, without saying where it got the information. Hyundai Motor Co. raised its China sales forecast for this year to 690,000 vehicles, from 670,000, and said the company’s third plant in the nation will make compact cars once production starts in the second half of 2012.
Crude Oil News
Oil rose in New York after European governments extended an 85 billion-euro ($113 billion) lifeline to debt-strapped Ireland and as a pickup in purchases by U.S. shoppers prompted optimism about fuel demand. The price of options to buy December 2011 futures at $100 a barrel jumped 14 percent on Nov. 24, the largest one-day gain in three months, according to data compiled by Bloomberg.
The January contract climbed as much as 39 cents, or 0.5 percent, to $84.15 a barrel, in electronic trading on the New York Mercantile Exchange, and was at $84.04 at 10:18 a.m. Sydney time. Brent crude for January settlement added 27 cents, or 0.3 percent, to $85.85 a barrel, on the Londonbased ICE Futures Europe exchange. So-called open interest for the contract has risen 51 percent this year to 45,424 lots, the highest for any crude option on the New York Mercantile Exchange.
Weather Report
In Malaysia at Kuala Lumpur thunderstorms and scattered rain are expected. Temperature may go up to 32 °C during day time. 60 per cent chance of precipitation is expected during the day time and night time. Temperature is expected to be at 23 °C at the low level.
According to the Jakarta Observatory, thunder storms and scattered clouds is expected. Day temperature may go up to 32 °C. There is 60 per cent chance for precipitation and temperature at low level will be 26 °C.
In Thailand, the climate is expected to be partly cloudy with 0-10 per cent chance of precipitation. Temperature may go up to 33°C during day time. Temperature is expected to be at 24 °C at the low level.
In Beijing, China, 0 percent chance of precipitation is expected. The climate is expected to be sunny and clear with wind. Temperature may go up to 6°C during day time. Temperature is expected to be at - 05°C at the low level.
In Singapore, thunderstorms and scattered clouds are expected with 60 per cent chance of precipitation. Temperature may go up to 31 °C during day time. Temperature is expected to be at 24 °C at the low level.
In Thiruvananthapuram, thunderstorms and scattered rain are expected with 60 percent chance of precipitation. Temperature may go up to 28 °C during day time. Temperature is expected to be at 24 °C at the low level. In Kottayam, scattered rain with thunderstorms is expected with 60 per cent chance of precipitation. Temperature may go up to 28 °C during day time. Temperature is expected to be at 23 °C at the low level.
Monday, November 29, 2010
TOCOM Rubber declines on weak crude oil
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