THURSDAY, APRIL 21, 2011
NMCE rubber futures reversed the trend on fresh buying at lower level on Wednesday. TOCOM futures market also traded up on short covering and September futures settled at ¥425.20 per Kg.
Domestic spot market also witnessed recovery after a continuous fall which supported the futures prices to trade higher. Therefore, taking cues from domestic spot and international market futures ended the day on higher note.
The rubbers futures are projected to continue the recovery on lower level buying on Thursday. However, TOCOM September futures are trading slightly down at ¥413.00 per Kg. on fresh selling on gains.
Concern of demand may decline from US as they have cut government spending which is likely to weigh on prices. Thus, in Indian market overall trend is likely to be very volatile.
Factors to Watch For
According to Bloomberg sources, China’s is likely to increase the interest rate for 5th time on rising concern of inflation
Decision of reduction in government spending by Us is also pressurizing the prices as demand for commodity used in auto industry is likely to decline
According to Department of Disaster Prevention & Mitigation, around 19,641 acres of rubber plantations have been damaged in Thailand due to heavy flood
According to the Rubber Research Institute of Thailand, The physical price of Thai rubber dropped to 177.3 baht ($5.89) a kilogram Tuesday
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE May contract, prices and open interest are falling while volumes are rising. prices and open interest are rising while volumes are falling. Market is attracting late buyers & early shorts; market is vulnerable to a sharp correction but likely that correction will be bought creating a buy point for uptrend.
Japan Futures (TOCOM)
The TOCOM active September contract, Prices, volumes are falling while open interest is rising. It is a good indication that a sharp rally against downtrend will develop creating a sell point for downtrend.
Shanghai Futures (SHFE)
The SHFE active August contract, prices are rising while volumes and while open interest are falling. Market is running out of traders willing to open or hold an open long/buy. Traders are liquidating both loosing short positions & closing winning long positions. A higher probability the market is set to retrace in price lower at some point forward.
Courtesy: Karvy Commtrade Ltd.
Rubber Declines as Toyota Extends Production Cuts After Quake
THURSDAY, APRIL 21, 2011
Rubber declined on concern that demand may weaken after Toyota Motor Corp., the world’s largest automaker, extended production cuts in some regions because of a parts shortage triggered by Japan’s record quake last month.
The September-delivery contract dropped as much as 3.4 percent to 411.3 yen per kilogram ($5,001 a metric ton) and ended at 412.3 yen on the Tokyo Commodity Exchange. Rubber surged yesterday on concern that supply from Thailand, the largest producer, may be disrupted by floods and rain, and an industry group has forecast that output this year may decline.
Toyota’s North American unit said yesterday that plants will remain shut on Mondays and Fridays and run at 50 percent on the three other weekdays until June 3. Toyota will also shut U.S. plants for a week from May 30 and in Canada from May 23.
“Toyota’s plan to cut production raised concerns that the car market this year may shrink,” Pornthip Wongjirattikarn, marketing manager at Future Agri Trade Co., said by phone from Bangkok. “This would slow demand for rubber.”
In China, the utilization rate at Toyota’s factories will generally be 50 percent of normal and may fall as low as 30 percent from April 21 to June 3, it said in a statement. Japan was rocked by its biggest recorded quake on March 11, triggering power cuts that shuttered factories.
A strengthening Japanese currency also hurt the rubber market, Ker Chung Yang, an analyst at Phillip Futures Pte, said from Singapore. Still, the low-production season, when output falls in top growers, helped to stem declines, he said.
The yen gained to 82.17 per dollar from 82.56 yesterday before a report forecast to show U.S. house prices fell for a fourth month, underscoring prospects the Federal Reserve will maintain monetary stimulus. A stronger Japanese currency boosts the costs of yen-based contracts for holders of other currencies.
China Imports
Rubber imports by China declined 4.6 percent to 470,000 tons in the first quarter compared with the year-earlier period, Beijing-based China Customs General Administration said today.
Rubber for September delivery in Shanghai fell 1.1 percent to close at 34,510 yuan ($5,294) a ton after rising as much as 1.1 percent earlier.
The physical price of Thai rubber was unchanged at 177.05 baht ($5.90) per kilogram, according to the Rubber Research Institute of Thailand. Chinese buyers continue to delay purchases, waiting for prices to drop, it said.
Thai rubber output may decline from last year if rains that caused floods persist, according to the Thai Rubber Association. Production may be 3.2 million tons this year, said Luckchai Kittipol, president of the group. That compares with last year’s 3.25 million tons and an earlier 2011 target of 3.49 million.
Unseasonal rains from the start of this year in Thailand caused floods in 10 southern provinces in March that may have damaged about 50,000 rai (19,641 acres) of rubber plantations, according to the Department of Disaster Prevention & Mitigation. Water levels have since receded, it said.
China’s Import of NR during March 2011
Rubber in Tokyo Declines After Rally as Strengthening Yen Reduces Appeal
THURSDAY, APRIL 21, 2011
Rubber dropped after jumping the most in almost a month as a strengthening Japanese currency cut the appeal of the yen-denominated contracts.
September-delivery rubber dropped as much as 1.3 percent to 420.5 yen per kilogram ($5,115 a metric ton), reversing a gain of 2.8 percent, before trading at 424 yen by 11:30 a.m. local time on the Tokyo Commodity Exchange. The contract yesterday jumped as much as 5.3 percent, the biggest gain since March 22, to 431.3 yen per.
“It’s a mix of factors today,” Ker Chung Yang, an analyst at Phillip Futures Pte, said by phone today from Singapore. “Stronger yen sends rubber weaker, while latex production is still low during wintering season.”
The yen gained to 82.25 per dollar from 82.56 yesterday before a report forecast to show U.S. house prices fell for a fourth month, underscoring prospects the Federal Reserve will maintain monetary stimulus even as central banks in Europe and Asia increase interest rates.
Farmers in Thailand, Indonesia and Malaysia, the top three growers, reduce tapping during the low production season, so- called wintering from February to May when trees shed leaves and latex production drops, according to the Association of Natural Rubber Producing Countries.Thai output declines as much as 60 percent compared with peak levels, the group said.
Thai Floods
Unseasonal rains from the start of this year in Thailand caused floods in 10 southern provinces since March 23 and may damage about 50,000 rai (19,641 acres) of rubber plantations, according to the Department of Disaster Prevention & Mitigation. Water levels receded and the government is rebuilding infrastructure in inundated areas, it said.
Rubber imports by India, the second-largest consumer, added 0.4 percent to 177,482 tons in the year to March 31, the state- run Rubber Board said in an e-mail on April 19. Output in the same period climbed 3.7 percent to 861,950 tons.
Rubber for September delivery in Shanghai surged as much as 1.1 percent to 35,270 yuan ($5,409) a ton before trading little changed at 34,870 yuan at 10:16 a.m. local time.
The physical price of Thai rubber gained 1.3 percent to 177.05 baht ($5.90) a kilogram yesterday, according to the Rubber Research Institute of Thailand. The price will be updated around midday.
Tokyo rubber futures up four percent
THURSDAY, APRIL 21, 2011
Bangkok (april 21, 2011) : tokyo rubber futures finished 4 percent higher on wednesday, with sentiment boosted by firmness of other commodities, but profit-taking pulled prices down from intra-day highs, dealers said. the benchmarkrubber contract on the tokyo commodity exchange for september delivery rose 16.2 yen, or 4 percent, to settle at 425.9 yen ($5.157) per kg. that was down from intra-day highs of 5.2 percent.
the most-active shanghai rubber contract for september delivery also rose 1,005 yuan to settle at 34,875 yuan ($5,340.409) per tonne. "sentiment improved after prices broke above a key resistance of 410 yen and 425 yen respectively," one dealer said.
tocom rubber was expected to rise further on thursday after prices finished above a key resistance of 425 yen, while dealers said recovering oil prices should provide additional support. india's natural rubber production in march rose 7.4 percent on year to 54,400 tonnes, the state-run rubber board said in a statement on tuesday, as record high prices prompted farmers to increase tapping.
Toyota slashes N.A. production through May
THURSDAY, APRIL 21, 2011
DETROIT (April 20, 2011)—Toyota Motor Sales U.S.A. Inc. will slash the production schedule at its North American manufacturing plants through June 3 in the wake of continued parts shortages stemming from the March 11 earthquake in Japan.
Originally, Toyota had placed its North American plants on three-days-a-week schedules through April 25. For the rest of April and May, that schedule will continue, according to a statement released April 19 by the auto maker. When the plants are building vehicles, it will be at a 50 percent pace—meaning the plants are operating at 30 percent of total capacity each week because of the additional two days of idle time.
In addition, Toyota’s U.S. production will be suspended the week of May 30, following Memorial Day, while its Canadian operations will be suspended the week of May 23, in conjunction with Victoria Day.
Toyota said no layoffs are planned. The auto maker declined to speculate on plant slowdowns after June 3.
Thailand: Rubber proposal bounces back
THURSDAY, APRIL 21, 2011
The cabinet yesterday decided to continue the 800,000 rai para rubber plantation promotion scheme despite a request by the National Anti-Corruption Commission to delay the controversial project.
However, it still acknowledged the NACC's suggestion by ordering the Agriculture and Cooperatives Ministry to carry out the scheme, and in conjunction with the Budget Bureau, the Natural Resources and Environment Ministry and the National Economic and Social Development Board, to inspect areas where problems are reported.
The cabinet resolution was announced by Agriculture and Cooperatives Deputy Minister Supachai Phosu who urged further support for the project as "it did benefit farmers".
"And most cabinet members agreed with that."However his ministry was only allowed to push ahead with rubber growing already approved for the first year of the 2010-2012 third phase plan.
Whether to carry out rubber growing for the remaining years will be considered later by the new government, according to Mr Supachai.
Deputy Prime Minister Suthep Thaugsuban, a member of the National Rubber Policy Committee, said any problems in the project must be separated from government policy so as to improve people's lives.
"The government policy to create careers for people and boost their revenue must go on and any corruption that is uncovered will be acted on," he said.
The NACC wanted the government to delay the policy's third phase, which aims to plant rubber trees on 800,000 rai of land, because it found a range of problems especially among northeastern planters during the policy's second phase which was carried out between 2004 and 2006.
The second phase is targeted at 1 million rai of land in the North and the Northeast.
According to the NACC, many planters lacked sufficient knowledge concerning the care of rubber trees, many of which died or did not grow well.
The commission also found alleged irregularities involving the acquisition and delivery of rubber saplings to planters which led to a suspicion that some state officials might be involved in corrupt activities.
The NACC suggested the government carefully examine the problems in the second phase before going ahead with the next phase of the scheme.
Promotion of rubber plantations without enough attention to location, farmers' capability and possible corruption could lead to a waste of funds and "cause serious damage to the state", the NACC said.
The commission's concern was also echoed by the National Economic and Social Development Board which also wanted the Agriculture and Cooperatives Ministry to delay the third phase of the scheme.
Though the third phase was agreed in principle by the cabinet and a number of farmers have joined it, the government was urged to call a temporary halt and carefully study flaws in the second phase.
It is crucial for the government to carry out the scheme transparently to gain trust from all state agencies, the board said.
India: Futures lift physical rubber
THURSDAY, APRIL 21, 2011
KOTTAYAM, APRIL 20:
Physical rubber prices improved on Wednesday. The market was reacting to the moderate recovery in domestic and international futures. But most of the traders were reluctant to increase their commitments before the long weekend holidays falling along with Easter. Prices recovered partially on fresh buying and short-covering at lower levels.
Sheet rubber improved to Rs 240 (Rs 235.50) a kg according to traders. The grade concluded at Rs 239 (Rs 236) a kg both at Kottayam and Kochi, as quoted by the Rubber Board.
RSS-4 rebounded with the May series rising to Rs 244.99 (Rs 237.23), June to Rs 249 (Rs 241.43), July to Rs 249.99 (Rs 242.13), August to Rs 242.90 (Rs 235.83) and September to Rs 232.65 (Rs 229.21) a kg on the National Multi-Commodity Exchange.
RSS-3 (spot) closed firm at Rs 263.02 (Rs 257.26) a kg at Bangkok. The April futures for the grade recovered to ¥456 (Rs 244.57) from ¥435 a kg during the day session and then to ¥458 (Rs 245.68) in the night session on Tokyo Commodity Exchange.
Spot rates (Rs/kg): RSS-4: 240 (235.50); RSS-5: 236 (233); Ungraded: 232 (228); ISNR 20: 233 (231); and latex 60 per cent: 147 (146).
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