BANGKOK, Dec 18 (Reuters) – Tokyo rubber futures slipped on
Thursday as the stronger yen weighed on prices, but an agreement
by top rubber producers to cut exports and a plan by Thailand’s
new government to shore up producer prices lent support.
* The benchmark rubber contract on the Tokyo Commodity
Exchange <0#JRU:> for May delivery fell 1.8 yen per kg, or 1.5
percent, to settle at 120.3 yen ($1.37) per kg.
* The benchmark fell as low as 114.8 yen per kg before
stop-loss selling set in.
* “The market was oversold and should have a technical
rebound after the producing countries sent signals that prices
were too low,” a Japanese dealer said.
* The dollar stood little changed at 87.80 yen , after
dropping as low as 87.13 yen, the lowest since mid-1995. There
was caution in the market that the Japanese authorities might
intervene to rein in the yen’s strength.
* A stronger yen deflates the value of Tokyo-listed futures,
encouraging investors to sell to adjust their positions.
* The rubber market also came under pressure from a drop in
oil prices, which underlined views on weak global demand.
* Rubber’s fate has been closely tied to that of the auto
industry as the commodity’s main use is the production of tyres.
* U.S. President George W. Bush said on Wednesday a decision
on bailing out the teetering U.S. auto industry needed to be made
“relatively soon” and that he was looking at all options.
[ID:nN1735094]
* Tyre production in Japan is expected to fall 5 percent next
year in terms of rubber usage, the Japan Automobile Tyre
Manufacturers Association (JATMA) said on Wednesday.
[ID:nT191452]
* U.S. crude futures steadied around $40 a barrel on
Thursday, near its lowest in more than four years, as further
evidence of slowing demand trumped OPEC’s biggest-ever production
cut.
* The rubber market was expected to get some support from
news the Thai government planned to intervene on domestic prices
to support farmers, dealers said.
* TOCOM prices were also aided by an agreement of the world’s
top three rubber producers — Thailand, Indonesia and Malaysia —
to cut exports by 915,000 tonnes in 2009, dealers said.

PRICES OF ASIAN PHYSICAL RUBBER COMPARED WITH WEDNESDAY
Grade Price Change
Thai RSS3 (Jan) $1.20/kg unchanged
Thai RSS3 (Feb) $1.20/kg unchanged
Thai STR20 (Jan) $1.15/kg unchanged
Thai STR20 (Feb) $1.15/kg unchanged
Malaysia SMR20 (Jan) $1.15/kg unchanged
Malaysia SMR20 (Feb) $1.15/kg unchanged
Indonesia SIR20 (Jan) $0.52/lb unchanged
Indonesia SIR20 (Feb) $0.52/lb unchanged
Thai USS3 35 baht/kg +1 baht
Thai 60-percent latex (drums, Jan) $950/tonne unchanged
Thai 60-percent latex (bulk, Jan) $850/tonne unchanged
($1=34.43 baht)
($1=87.80 Yen)

Source:  Reuters

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