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SINGAPORE, March 29 (Reuters) – Tokyo rubber futures fell
more than 2 percent on Thursday and hit their lowest in three
weeks, as the yen strengthened against the U.S. dollar and the
Nikkei benchmark slipped on end-of-quarter selling.
But tight supply in main producer Thailand and hopes that
the Thai government would buy more rubber from farmers to
support domestic prices could prop up Tokyo rubber futures,
which were set for their biggest quarterly rise since late 2010.
The most active rubber contract on the Tokyo Commodity
Exchange, currently September, fell 7.7 yen a kg to end at 329.1
yen, after hitting a low of 327.4 yen, its weakest since March
9.
“The wintering season is happening. Fundamentally, it’s
still the Thai purchasing programme that is supporting the
prices,” said Ker Chung Yang, an investment analyst at Phillip
Futures in Singapore.
Thailand has started a 15 billion baht intervention
programme to push up domestic prices by buying rubber from
farmers, although not much has been purchased so far.
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<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For quarterly poll on TOCOM [RUB/POLL] For weekly softs outlook [SOF/AS] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Thailand is in the dry wintering season, when farmers in
major rubber areas have completely stopped tapping as rubber
trees stop producing latex, leading to a sharp fall in supply.
Farmers normally resume tapping in late April, when the dry
season ends and supply is expected to get back to normal in May.
In the equity market, the Nikkei fell for a second session
on Thursday and slipped further from a one-year high hit earlier
this week as investors locked in profits from a meteoric
January-March rally that is poised to be its best first-quarter
performance in 24 years. [.T]
The yen was a shade stronger across the board on Thursday
but could come under renewed pressure as buying linked to the
end of Japan’s financial year is set to peak this week. [USD/]
The most-active Shanghai rubber contract for May delivery
ended at 27,895 yuan a tonne, down from 28,230 yuan at
the close on Wednesday.
The front-month April rubber contract on Singapore’s SICOM
exchange was last traded at 376.50 U.S. cents per kg,
down 3 cents.
Source: Reuters