NMCE Rubber gains on fresh buying

NMCE rubber futures witnessed high volatility on Thursday. Futures started the day on positive note on fresh buying on lower levels. TOCOM futures showed recovery from 2 week’s low on short covering on lower levels.
However, active selling at higher levels pulled down the prices. Reports of increased in supply because prevailing higher prices encouraged farmers to go for further tapping activity.
Oil fell after the Labor Department reported a bigger than forecast gain in jobless claims, and data showed orders for U.S. durable goods decreased in December. Thus, mixed spot market activity and down crude oil prices weighed on sentiments and futures ended on negative note.
The rubber futures are projected to extend the bearish trend on Friday. TOCOM rubber June futures are also trading lower at ¥465.7.0 per Kg. falling crude oil prices also pressurizing the prices.
Thus, on cues from international market Indian futures might trade higher during the day. Reduced buying from China, major natural rubber consumer ahead of week long holidays due to Lunar New Year is further pressurizing the prices.
Indian domestic market is also witnessing a choppy trade as buyers are reluctant to buy at these levels. Thus, on cues from all above stated factors natural rubber prices are expected to fall today. However, short covering at lower levels can not be overruled.
Factors to Watch For
The physical price of natural rubber in Thailand, the largest exporter, dropped 0.8 percent to 176.55 baht ($5.69) per kg, according to Rubber Research Institute of Thailand
President of Cochin Rubber Merchants Association attributes the price rise to the surge in international prices and withholding of stocks by growers. Productivity of the domestic rubber plantations has come down as 30% of the area is overdue for replanting
According to Association of Natural Rubber Producing Counties (ANRPC), supply in January may have increased 2.9% from a year earlier to 866,000 tons. Farmers in major producing countries have been encouraged to tap old dormant trees due to prevailing high prices in market
According to latest reports nearly 16,000 hectares in Thailand have been destroyed due to strong winds which may further add to the prices rise
Rains are expected to spread across the southern provinces of Thailand this week, the country’s Meteorological Department said on its website. The south produces about 80 percent of Thailand’s rubber
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February contract, prices and open interest are falling while volumes are rising. Market has a lot of traders initiating from both sides but larger traders may be liquidating into the higher prices. The market may be vulnerable to large price swings as shorter time frame traders attempt to trade from both sides of the market but liquidating before end of- day. Often a signal of a market turns near-term or continued volatility.
Japan Futures (TOCOM)
The TOCOM active June contract, Prices are rising while volumes and open interest are falling. Market is running out of traders willing to open or hold an OPEN LONG/BUY. Traders are liquidating both loosing short positions & closing winning long positions. A higher probability the market is set to retrace in price lower at some point forward.
Shanghai Futures (SHFE)
The SHEF active June contract, Prices are rising while volumes and open interest are falling. Market is running out of traders willing to open or hold an OPEN LONG/BUY. Traders are liquidating both loosing short positions & closing winning long positions. A higher probability the market is set to retrace in price lower at some point forward.

(Source: http://www.commodityonline.com/futures-trading/technical/NMCE-Rubber-gains-on-fresh-buying-21537.html)