TOCOM Rubber rises on weak Yen

International Market

Natural rubber futures prices in Tokyo remain positive on weaker Yen, forward shipment purchases news by Bridgestone Corp and news of G.M to hire 1,000 engineers over two years to develop electric cars. The natural rubber prices are expected trade sideways.
April contracts have short term resistance at 362.40, 363 and 365. Support will be at 360 and 356.50. The futures will attract minor buying interest till noon.
Domestic Market

The Indian growth story was intact, the GDP number which came yesterday was much better than what we expected. The firm trend in GDP will lift the sentiment to a greater extent; today major automobile companies will announce the sale numbers. In the domestic market price may remain weak due to dry weather forecast. Active tapping is expected in these days. Support will be at 193.19 and 192.61. Resistance will be at 197.58 and 195.29.
Analysis of Tokyo Rubber Market
The market gained 2.9 yen to finish the session at 360.2 yen due to regained Shanghai rubber maket. Following the night session, finished at 362.1 yen, higher by 4.8 yen, with a help of stronger oil prices and technical buying above 360.0 yen, the day session resumed trading slightly higher at 362.5 yen but soon increased gain to the day’s high at 366.4 yen since oil prices gained further and yen got firmer.
However, as Shanghai rubber market gradually erased ealier gain and broke below 30,000 yuan, TOCOM rubber market followed Shanghai rubber market and once turned to move in a minus territory around 356 yen level. Afterward, even though the market was capped by technical selling at around 358.0 yen and weakened oil prices, it sharply rebounded and recovered 360 yen level again toward closing as Shanghai rubber market showed V-shape recovery in the afternoon. Shanghai rubber market once fell down to minus side at 29,500 yuan but sharply recovered at the end. It finally closed at 30,880 yuan with a gain of 575 yuan.
Technically saying, the market does not have a clear direction yet with a price range between 350.0 yen and 370.0 yen because of a lack of strong driving factors. Thus, the range market could be expected for a while. Funds seem to roll their long positions over forward contract as seen in the spread between April and May contract shrinking and becoming contango market once. The spread could be widened to around 0.5 yen premium at an immediate front.
Rubber News
Rubber, set for a fifth monthly gain, climbed as a weakening Japanese currency and limited supply in Thailand, the largest shipper, improved the appeal of the commodity used to make tires and gloves. Tokyo market opened today all contracts opening above the previous closing price. Natural rubber future prices rose as high as 366.4 yen on Thursday. At the lowest level the prices touched 354 yen. Most active May deliveries closed with loss of 2.9 yen. Night session on Thursday January, February and March contracts moved to the positive side, whereas December, April 11 and May 11 deliveries traded with negative trend.
The December deliveries closed with the highest loss of 1.6 yen whereas the gains limited to below 1 yen. Rubber stock with TOCOM designated warehouses dropped by 312 tons and recorded 4699 tons as on November 20, 2010. Today December and January deliveries opened with negative trend, December deliveries making the highest loss of 3.1 yen. All other contracts show positive trend. Most active May deliveries though opened below previous day’s close, rose as high as 362.5 yen but climbed down to 356.1 and is currently trading at 361.6 yen making gain of 1.4 yen.
In Shanghai market, natural rubber futures traded with positive trend, all contracts making gains. Major gain was made by July 11 which was closed with gain of 765 yuan. Most active May 11 deliveries opened 1.95 per cent above previous day’s close and rose as high as 31080, but dropped down to 29500 yuan before closing at 30880 making gain of 575 yuan. Natural rubber stock with Shanghai Futures Exchange dropped by 25 tons and recorded 48360 tons.
In Thai market all RSS 3 rubber futures contracts except March contracts closed with gains. Most active July contracts closed with gain of .20 baht per kg. The highest gain was made by April deliveries which closed making gain of 0.50 baht per kg. The market has moved to the positive zone today, most active July deliveries trading with gain of 0.75 baht per kg.
In Malaysian market SMR 20 natural rubber physical FOB prices closed at 1312.50 sen per kg for buyers and 1325.50 sen per kg for sellers. The market is said to be quiet steady.
The Automotive Tyre Manufacturers Association (ATMA) intends to persist with its charge of manipulation of natural rubber prices on the Ahmedabad-based National Multi Commodity Exchange (NMCE) as reported by Business Standard on Tuesday. The Forward Markets Commission (FMC), the commodity markets regulator, had earleir declined an ATMA request to intervene. However, ATMA plans to write again to FMC and NMCE in coming days, reiterating its point on the need for a reduction in the daily price band of the NMCE.
India, the fourth-biggest producer of natural rubber, is considering allowing imports of as much as 100,000 metric tons at a lower duty to meet surging demand for tires as rising incomes boost car sales. This was revealed by the Trade Secretary Rahul Khullar in an ineview yesterday. The trade ministry has recommended imports at a concessional rate for a maximum of 100,000 tons and tax changes on tire imports, he said, declining to elaborate.
Rubber imports are taxed at 20 percent. Natural rubber prices in India reached a record last month on concern that the low-output season in Southeast Asia will worsen a deficit. Futures on the Tokyo Commodity Exchange reached a 30-year high of 383 yen on Nov. 11 as rain in Thailand, Indonesia and Malaysia, the top three growers, interrupted tapping and lowered production.
Imports in the year to March 31 are expected to exceed 200,000 tons, from 170,048 tons a year earlier, according to tyre makers association’s Director General Rajiv Budhraja. Natural-rubber output may drop for a second straight month in November after falling 7.6 percent to 82,000 tons in October, as rains hinder tapping in Kerala, India’s top producer, he said.
Crude Oil News
Oman crude, a Persian Gulf benchmark for Asia, rose for a fourth month as a diesel shortage in China prompted refiners in the country to boost crude purchases. Oil traded near its highest in more than two weeks in New York after U.S. consumers spent more over the Thanksgiving weekend than last year, signaling fuel demand may increase in the biggest crude-consuming nation.
Oil dropped from the highest in two weeks amid concern that the European Union may have to bail out more member states after Ireland agreed to a rescue package from the EU and the International Monetary Fund. Brent crude declined 0.01% or 0.010 points and reached 85.930.
India News

Belying expectations of a slowdown, the Indian economy expanded at better than expected pace of 8.9 per cent in the second quarter of this fiscal, prompting experts to peg the growth rate for the current financial year at 9 per cent. After this report was published Finance Minister said that India can achieve GDP growth between 8.5 percent and 8.75 percent in the current fiscal that ends in March 2011.
The Reserve Bank of India (RBI) could raise the cash reserve ratio (CRR), the money that is kept by the banks with the RBI, if the tight liquidity conditions prolonged.India’s economy is likely to surpass the government’s 8.5 percent growth target for the fiscal year, forcing the central bank to resume interest-rate increases as domestic demand offset risks from abroad. Gross domestic product [] climbed 8.9 percent for a second straight quarter in July to September, a government report showed yesterday, with the gains propelled by the manufacturing and services industries. India is could achieve 9 per cent growth soon according to Kaushik Basu, Chief Economic Advisor to the Finance Ministry.
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 25 °C.
In Thailand, the climate is expected to be partly cloudy with 10-20 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. Temperature may go up to 11°C during day time. Temperature is expected to be at -01°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 32 °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.

(Source: http://www.commodityonline.com/futures-trading/technical/TOCOM-Rubber-rises-on-weak-Yen-20236.html)