TOKYO, March 30 (Reuters) – Tokyo rubber futures fell 2 percent on Monday, extending Friday’s retreat from a four-month high near 160 yen, as oil prices dropped on a bleak outlook for energy demand.
* Key rubber futures fell as low as 149.9 yen per kg or down 2.8 percent, in a correction from the recent rally, with external factors providing little help, traders said.
* The Tokyo Commodity Exchange rubber contract for September delivery <0#JRU:> ended at 150.7 yen per kg, down 3.5 yen or 2.3 percent.
* The contract rose as high as 159 yen on Friday, the highest level for any benchmark since Nov. 19, as chart-led buying gained momentum after it broke above the 150 yen barrier.
* “The market may have hit a ceiling when it reached 159 yen, now that there are more chances of oil falling below $50 and the dollar has failed to rise to 100 yen,” said a manager at a Japanese commodity brokerage.
“It’s likely that the market will come back to this year’s core range in the 140 yen zone.”
* Rubber futures eased on news that the Obama administration autos task force on Monday rejected the turnaround plans of General Motors Corp and Chrysler LLC and warned both could be put through bankruptcy to slash debts. [ID:nLU152601] [ID:nN29520526]
* “What’s important for the rubber market is how these automakers will be handled — whether they will be merged by other automakers so production will continue, or let to continue operations on their own for now,” said a dealer at a Japanese trading firm.
* “Until the next stage becomes clear, rubber prices will likely move sideways, with traders adjusting their positions, selling contracts with premiums to book profits and using them to cover other losses,” the dealer said.
* U.S. auto sales likely slogged at the weakest monthly rates in more than 27 years in March and show few signs of life, adding to the pressure on GM, Chrysler and Ford Motor Co . The auto sales data is due on April 1. [ID:nN27267260]
* U.S. crude oil futures extended the previous session’s losses, falling below $51 a barrel on Monday, as a bleak near-term energy demand outlook prompted investors to take profits on oil’s recent rally. [O/R]
* The dollar fell more than 1 percent against the yen after last week’s rally halted below 99 yen. A stronger yen erodes yen-based commodity futures prices. [USD/]
* In the physical rubber market, prices were mostly unchanged, but were underpinned by tight supplies and buying from Chinese users mainly in the most competitive Indonesian origin.

PRICES OF ASIAN PHYSICAL RUBBER COMPARED WITH FRIDAY
Grade Price Change
Thai RSS3 (Apr) $1.55/kg unchanged
Thai RSS3 (May) $1.55/kg unchanged
Thai STR20 (Apr) $1.53/kg -$0.02
Thai STR20 (May) $1.53/kg -$0.02
Malaysia SMR20 (Apr) $1.53/kg unchanged
Malaysia SMR20 (May) $1.53/kg unchanged
Indonesia SIR20 (Apr) $0.62/lb unchanged
Indonesia SIR20 (May) $0.62/lb unchanged
Thai USS3 48 baht/kg unchanged
Thai 60-percent latex (drums, Apr) $1,300/tonne unchanged
Thai 60-percent latex (bulk, Apr) $1,200/tonne unchanged

Source: Reuters

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