NMCE Rubber surges on fresh buying

NMCE rubber futures traded positive on active fresh buying on lower level on Saturday. TOCOM futures market also witnessed positive trend and September futures settled at ¥463.70 per Kg on Friday. Domestic spot market witnessed small recovery on Saturday. Thus, on cues from overall market trend prices at NMCE platform ended the day on positive note.
The rubbers futures are projected to continue the gains on follow through buying on Monday. TOCOM September futures are trading higher at ¥479.0 per Kg. on lower level buying. Limited supply from Thailand due to New Year holiday might support the prices international market. However, domestic Indian rubber market has again fallen on Sunday which might limit the gains.
Factors to Watch For
Thai market will be closed from April 13 to 15th due to Thai New year. Therefore supply might remain tight in world rubber market
According to Bloomberg sources, China’s natural-rubber imports were 210,000 tons in March, compared with 110,000 tons in February and 190,000 tons in March2010
Floods in Thailand, world’s largest exporter have impacted the supply of commodity used in tyres and rising crude oil prices are also supporting the rubber prices
According to Department of Disaster Prevention & Mitigation, around 19,641 acres of rubber plantations have been damaged in Thailand due to heavy flood
According to the Rubber Research Institute of Thailand, physical price of Thai rubber gained 0.5 percent to 184 baht ($6.12) a kg. Friday
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
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE May contract, prices and open interest are rising while volumes are declining. Market is attracting late buyers & early shorts; market is vulnerable to a sharp correction but likely that that correction will be bought creating a buy point for uptrend.
Japan Futures (TOCOM)
The TOCOM active August 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 SHFE active July contract, prices, volumes are rising while open interest is falling. 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 signals of a market turn near-term or continued volatility.
Courtesy: Karvy Commtrade Ltd.

(Source: http://www.commodityonline.com/futures-trading/technical/NMCE-Rubber-surges-on-fresh-buying-23128.html)