Daily report on Natural Rubber: August 24, 2012

MARKET COMMENTARY

• Natural rubber in the Indian market on Thursday took a brief hiatus from its three day successive decline. NMCE rubber futures gained around one per cent while in the ready market RSS4 was quoted slightly higher from the previous session close. A mild improvement in the sentiments was visible tracking natural rubber prices in the major markets and gain in crude oil and other commodities. However, activities are likely to hold back in coming days as Kerala, the top natural rubber producer in India, will be celebrating ‘Onam’ next week.
• In the international scenario, natural rubber prices were swinging between positive and negative territories on Friday. Fading hopes over monetary stimulus from the US Federal Reserve dampened the overall market sentiments. TOCOM rubber futures were probably heading to end the week in losses after registering gains the previous week.

MARKET NEWS

• China HSBC flash manufacturing PMI hit nine month low in August.
• Crude rubber stockpiles held at Japanese warehouses fell 14.1 percent to 7,993 metric tons on Aug. 10, according to data from the Rubber Trade Association of Japan.
• Thailand is planning to spend an additional 15 billion baht on rubber in rubber intervention. So far, around 80000 tonnes of rubber has been procured from the farmers under the program.
• According to a report appeared on Bloomberg, rubber inventories in China’s bonded warehouses are likely to climb to 250000 tonnes by the end of August.
• Tyre-grade rubber tumbling to their lowest since 2009 in the international market reignites worries over default.
• Rubber inventories in the warehouses monitored by SHFE rose 10.4 per cent to 25736 tonnes last week.
• In the latest attempt to prop up natural rubber prices, top three natural rubber producing countries, Thailand, Indonesia and Malaysia, have agreed to cut down rubber trees and trim exports by 300000 tonnes.

TECHNICAL VIEW

RUBBER Sep NMCE

Pullback seen from 16580 was held near 16800 region in the previous session. The broad trend remains weak and any attempts to move higher are likely to find resistance near 16900-17050 regions and turn lower. Slippage past 16580 may see prices testing 16450-16370. However, it requires breaking the 200 week moving average 16370 convincingly to evolve into another major sell off. Meanwhile, successful attempts to sustain above 17050 may negate the bearish view for the day.

Source: Geojit Comtrade

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