NMCE Rubber ends higher on short covering

NMCE rubber futures traded positive on active short covering after witnessing a huge fall on Saturday. Futures started the day on positive note on short covering. Positive trend in domestic spot market also supported the prices to recover. However, TOCOM futures market remained down and ended in red on Friday. Thus, negative cues from international market limited the gain at NMCE.
The rubbers futures are projected to continue the positive trend on active short covering on Monday. However, TOCOM August futures are trading down at ¥416.0 per Kg. on strong selling interest. Domestic spot market has also reported a significant upsurge in prices which might support the Indian futures to trade higher. However, negative cues from TOCOM might weigh on prices later in the day.
Factors to Watch For
As per deputy head of the China Rubber Industry Association, Natural-rubber demand in China, the biggest consumer, will rise 8% this year. Consumption will be 3.24 million metric tons, while tire output will climb 7.9 percent to an all-time high of 453 million units
As per the Committee on rubber policy of Thailand Government, Thai government will negotiate with commercial banks to extend loans to exporters to buy rubber from farmers at a minimum price of 120 baht per Kg
According to rubber board of India, Indian February Natural Rubber Output is 54,500 Tons Vs 51,500 Tons, consumption is 79,000 Tons Vs 76,350 Tons and imports are 6,831 Tons Vs 12,278 Tons
As per data released by rubber board, the year end deficit in natural rubber in India is estimated around 1.2 lakh tons and it is expected to be increase to 2 lakh tons during 2011-12
According to Rubber Research Institute of Thailand, ribbed smoked sheet prices gained for a fourth day, up by 6.4% to 170 baht a kilogram on Tuesday
According to the Association of Natural Rubber Producing Countries, Consumption in China, India and Malaysia, representing 48% of global usage, will increase this year
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE April 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.
Japan Futures (TOCOM)
The TOCOM active August contract, prices and volumes are falling while open interest is rising. It is a good indication that a sharp rally against downtrend will develop creating a sell point for downtrend
Shanghai Futures (SHFE)
The SHFE active July contract, prices and open interest are falling while volumes are rising. Market is running out of traders willing to open or hold an open short/ sell. Traders are liquidating both loosing long positions & closing winning short 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-ends-higher-on-short-covering-22832.html)