BANGKOK, April 5 (Reuters) – Tokyo rubber futures rose to a
19-month high on Monday on the back of tight physical supply and
strong oil prices plus a weaker yen, dealers said.
* The benchmark rubber contract on the Tokyo Commodity
Exchange <0#JRU:> rose 8.4 yen to settle at 326.6 yen ($3.46) per
kg. It rose as high as 326.8 yen per kg, the highest since
September 2008.
* “TOCOM sentiment should remain firm as tight supply on the
physical market still provides support,” one dealer said.
* Supply, especially in Thailand, the world’s biggest
producer, is falling as the country is in its dry season when
rubber trees stop producing latex and farmers usually stop
tapping, resulting in a sharp drop in production. The benchmark
Thai RSS3 was offered at $3.62 per kg, the highest ever, due to
tight supply, dealers said.
* U.S. crude futures jumped 1 percent towards $86 a barrel on
Monday, hitting their highest since October 2008, after data
showed U.S. employers created jobs in March at the fastest rate
in three years. [O/R]
* Strong oil prices usually support TOCOM prices as it makes
petrochemical-based synthetic rubber expensive and usually
encourages tyre makers to shift to natural rubber.
* The dollar firmed to its highest in more than seven months
against the yen on Monday, extending gains after generally
positive jobs data indicated the U.S. economic recovery was on a
better footing.[USD/]
* A weaker yen makes dollar-based rubber expensive and
usually encourages investors to take speculative buying positions
on TOCOM rubber.
* TOCOM prices were likely to rise higher on Tuesday as
technical sentiment improved after prices finished above the key
psychological level of 320 yen per kg, dealers said.
($1=94.38 Yen)

Source: Reuters

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