BANGKOK, Feb 1 (Reuters) – Tokyo rubber futures, pushed down
recently by weaker oil prices, a firmer Japanese yen and tighter
Chinese credit policy, could stabilise this month and turn back
up towards 300 yen per kg in March, a Reuters poll showed
Falls were likely to be capped by seasonal supply tightness,
the poll said.
The benchmark sixth-month rubber contract on the Tokyo
Commodity Exchange , currently July 2010, was forecast to
be at 287.5 yen ($3.20) per kg by the end of February, according
to the median forecast of 10 analysts and dealers polled by
Reuters.
That was 1.7 percent below the forecast of 292.5 yen per kg
in a similar poll in early January and well below the level of
300 yen breached during the month, but it was above the 274.3
yen settlement on Friday, the final trading day of January.
TOCOM rubber will rebound in March, according to the poll,
which forecast a break back above key resistance at 300 yen
because of seasonal supply pressures and an end-March figure of
318.8 yen per kg.
“Supply is likely to get tighter as the wintering dry season
in Thailand is coming,” Hiroyuki Kikukawa of Nihon Unicom said.
In the dry season, which usually starts in late February and
runs through April, rubber trees shed their leaves and stop
producting latex, forcing farmers to stop tapping and resulting
in a sharp drop in supply in March and April.

SHORT-TERM TECHNICAL WEAKNESS
The 300 yen level was unlikely to be hit in February,
traders said.
“Technical charts point to a correction from the 300 yen
level reached earlier in 2010,” said Masato Miyanaga of
Tokyo-based H.S. Futures.
TOCOM rubber prices surged to a 15-month high in mid-January
and went above 300 yen per kg on the back of strong oil prices
above $80 a barrel.
But prices eventually retreated as players unwound contracts
due to weaker oil prices — crude was around $72.70 a barrel on
Monday — and a stronger Japanese yen, dealers said.
“TOCOM will lack momentum to break above 300 yen if the yen
keeps rising like this,” said a trader in Thailand’s Hat Yai
rubber centre.
Dealers said China’s policy tightening was a worry as it
deterred investment funds from pouring money into commodity
markets.
In contrast to the trend in TOCOM futures, a drop in supply
at a time when demand on the physical front remained strong
ahead of the Lunar New Year, cash rubber prices could stay
relatively high during the months of February and March, dealers
said.
Thai RSS3 was forecast to stay at $3.05 per kg by
end-February, little changed from $3.10 at the end of January.
Malaysian SMR20 could be at $3.03 per kg, also little
changed from $3.05 per kg in January, while Indonesian SIR20 was
forecast to stay at $3.0 per kg by the end of February,
according to the poll.

Forecasts for TOCOM sixth-month rubber prices in yen per kg:
end-February end-March
Median 287.5 318.8
Lowest 240.0 250.0
Highest 340.0 350.0
1. Unattributable 280 270
2. CV Roben 310-340 320-350
3. Supara Rubber 315 320
4. Unattributable 270-290 300-330
5. Unattributable 300 320
6. Unattributable 280-290 300
7. Nihon Unicom Inc 280 250
8. H.S. Futures 240-250 320
9. D.S. Futures 285-295 310-325
10. A.T.S. Rubber 310 320

Forecasts for Thai RSS3 in U.S. dollar per kg:
end-February end-March
Median 3.05 3.20
Lowest 2.70 3.00
Highest 3.20 3.30
1. Supara Rubber 3.20 3.25
2. Unattributable 2.70-3.00 3.00-3.30
3. Unattributable 3.10 3.20
4. Unattributable 3.00-3.20 3.30
5. Unattributable 3.00 3.20
6. Unattributable 3.00 3.00

Forecasts for Thai STR20 in U.S. dollar per kg:
end-February end-March
Median 3.08 3.09
Lowest 2.65 2.80
Highest 3.20 3.25
1. Unattributable 3.00 2.80
2. Supara Rubber 3.20 3.25
3. Unattributable 2.65-2.90 2.95-3.20
4. Unattributable 3.10 3.10
5. Unattributable 2.95-3.15 3.20
6. Unattributable 3.00 3.00

Forecastes for Malaysia SMR20 in U.S. dollar per kg:
end-February end-March
Median 3.03 3.05
Lowest 2.60 2.60
Highest 3.20 3.25
1. Unattributable 3.00 2.80
2. Supara Rubber 3.20 3.25
3. Unattributable 2.60-2.80 2.60-2.80
4. Unattributable 3.10 3.10
5. Unattributable 2.95-3.15 3.20
6. Unattributable 3.00 3.00

Forecasts for Indonesia SIR20 in U.S. dollar per kg:
end-February end-March
Median 3.00 3.11
Lowest 2.60 2.60
Highest 3.30 3.40
1. Unattributable 3.00 2.80
2. CV Roben 3.13-3.30 3.20-3.40
3. Supara Rubber 3.00 3.12
4. Unattributable 2.60-2.80 2.60-2.80
5. Unattributable 3.00 3.10
6. Unattributable 2.95-3.15 3.20
($1=89.95 Yen)

Source: Reuters

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