09 Feb 2010
Volumes traded for RSS3 rubber futures fell by almost 50% on the Tokyo Commodity Exchange compared with Friday as investors adopted a cautious approach, looking for firm trends before taking any positions.
The benchmark July contract on Tocom settled Y1.4 lower at Y266.6 a kilogram after reaching an intraday low of Y266.2.
"Many investors were waiting for prices to rise above Y270/kg before taking short positions again, but this didn't happen during the day session," said a Thailand-based analyst.
Prices did recover during the night session, with the July contract settling at Y270.3/kg. Night session prices aren't included in intraday trading.
While tight physical supply is supportive, concerns over the health of the global economy is weighing on prices.
There are concerns that debt related problems in some European countries, as well as a stronger dollar may prompt institutional funds to shift toward currency trading from commodities such as natural rubber.
Some investors also liquidated positions ahead of the Lunar New Year holiday.
The benchmark May contract on the Shanghai Futures Exchange settled CNY15 lower at CNY22,175/ton as investors took profits.
The benchmark September contract on the Agricultural Futures Exchange of Thailand settled THB1.35 lower at THB97.50/kg.
Asian physical rubber prices were lower, taking leads from the losses in futures, but buyers were still making purchases to meet immediate requirements.
"We're still getting STR20 orders but mostly for shipment until April, as buyers are cautious in placing orders for distant months," said a Thailand-based trading executive.
Thai USS3 prices traded slightly lower, despite a slowdown in market arrivals. USS3 sellers were holding back supply, as they expect prices to go up with the onset of the wintering season, but factories were reluctant to pay higher rates due to the uncertain direction of RSS3 and TSR20 futures.
The wintering season, accompanied by the falling of leaves and lower yields, may result in lower availability of natural rubber.
In other news, the Tokyo Commodity Exchange has introduced block trades in various commodities including natural rubber to enable large transactions without prices being impacted significantly.
There won't be any transaction size for the block trades, but one of the parties involved in the transactions should be investors involved in investment funds and exchange traded funds, said an executive, who didn't want to be named.
The Osaka-based Central Commodity Exchange plans to delist RSS3 rubber futures on low volumes. Delisting is expected shortly after it is officially approved by the Extraordinary Members' Meeting next month.
Asian Rubber Futures
Feb 08 Change from
previous close
Tocom Jul RSS3 Y266.6/kg Dn Y1.4/kg
C-Com Jul RSS3 Y275.7/kg UNCHANGED
Shanghai May SCR5 CNY22,175/ton Dn CNY15/ton
Thai Sep RSS3 THB97.50/kg Dn THB1.35/kg
Sicom Mar RSS3 296.0 U.S. cents/kg UNCHANGED
Sicom Mar TSR20 291.5 U.S. cents/kg Dn 1.5 cents/kg
The following are physical prices in
Grade Shipment Feb 08 Feb 05
Bids Offers Bids Offers
RSS3 Mar/Apr - 295 - 300
STR20 Mar/Apr - 298 - 300-302
SIR20 Mar/Apr - 293 - 294-295
SMR20 Mar/Apr - 296-297 - 301
USS3 Feb THB90.29-THB90.65 THB90.79-THB91.36
Source : Dow Jones
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