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TOKYO, April 26 (Reuters) – Tokyo rubber futures rose on Monday, supported by tight supply, a weaker yen and rising oil prices.
* The key Tokyo Commodity Exchange rubber contract for October delivery <0#JRU:>, which debuted on Monday, closed at 316.2 yen per kg after opening at 320.7 yen.
* The other contracts were higher from Friday’s settlement prices, with the previous benchmark contract for September delivery rising to 320.7 yen, up 5 yen from 315.7 yen on Friday.
* In the physical market, benchmark Thai RSS3 was offered at $4.00 per kg as tight supply due to unfavourable weather kept prices from falling. Earlier this month, it was offered at a record high of $4.10 per kg.
* On Friday, then spot April TOCOM contract expired at a record high price of 455.4 yen per kg, with 142 lots or 710 tonnes of deliveries. The April contract had gained sharply on strong demand amid tight physical supply and technical buybacks before its expiry. [ID:nTOE63M06N]
* A sharp fall in the number of deliveries from 380 lots delivered for the March contract last month was attributed to limited rubber cargoes available in Tokyo.
* “The April contract expired, but the problem of a lack of cargoes to deliver through TOCOM remains and keeps putting an upward pressure on the spot contract,” said a manager at a Japanese brokerage.
“The situation won’t easily change until July or so, if and when rubber prices in producing countries start falling again and shippers find TOCOM prices more attractive than at present,” the manager said.
* Oil rose above $85 a barrel on Monday, adding to gains from the previous session when strong U.S. economic statistics raised new hopes that the economic recovery was on course. [O/R]
* The euro remained wobbly against the dollar on Monday after recovering from one-year lows the previous business day when Greece sought to activate a financial aid package while Germany said it was ready to commit to a plan that would bail out the country. [USD/]
* Tokyo rubber futures are expected to continue to gain on tight physical supply, strong demand from China and lower costs compared with spot physical prices, traders said on Friday. [ID:nSGE63M0DX]
* For the spread of the front month vs the benchmark, click:
http://graphics.thomsonreuters.com/gfx/WT_20102304163659.jpg
* TOCOM rubber’s May contact is trending upwards toward a bullish target of 447 yen per kg over the next month, which is the 461.8 percent Fibonacci projection level. [ID:nSGE63M0CY]
* In Shanghai, rubber inventories have been falling since late January, according to the Shanghai Futures Exchange’s weekly data. The exchange said on Friday deliverable rubber inventories in warehouses it monitors fell 13 percent from one week earlier. [ID:nTST000113]
Source: Reuters