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[Geojit Comtrade] Daily report on Natural Rubber: May 2, 2013

MARKET COMMENTARY

As the trading resumes after Labour Day holiday, natural rubber prices are seen declining in the overseas market. The benchmark September rubber futures on SHFE opened on a weaker note as it resumed trading after three days holiday while TOCOM rubber futures are seen stretching previous session losses as worries over demand mounted following lacklustre economic indicators from the US and China. Chinese official as well as HSBC manufacturing PMI pointed towards a slow down in the world’s second largest economy. Investors remained cautious ahead of other key data/events including ECB rate announcement and the US jobs data. Sentiments are likely to weaken in the local market too, tracking sliding prices in the overseas market. Also, with tapping likely to gather pace, production is seen rising in coming days. The major rubber growing areas in Kerala has been receiving rains for the past few days aiding tapping.

MARKET NEWS

The Thai government has no immediate plan to sell rubber from stockpiles as it will push prices of the commodity lower according to deputy farm minister Yuttapong Charasathien.

Crude rubber stockpiles held at Japanese warehouses rose 2 percent to 15,976 metric tons on April 20, according to data from the Rubber Trade Association of Japan.

Yokohama Rubber Co. announced plans to build a new plant to manufacture tires for trucks and buses in the United States and will have an annual production capacity of 1 million tires.

Indian Metrological Department sees normal monsoon for the current year and likely to issue prediction on monsoon onset around May 15.

According to Union Commerce and Industry Minister Anand Sharma, import duty on natural rubber was to be hiked soon though the Minister of State for Finance in a written reply in Lok Sabha ruled out a hike for now.

Rubber Stockpiles in the Qingdao bonded zone, climbed to 371,100 metric tons at the end of this month from 366,900 tons on April 15.

According to Indonesian Rubber Association, natural rubber output during 2013 may decline to 3.0 million tonnes from the earlier estimates of 3.2 million tonnes due to wet weather.

TECHNICAL VIEW

RUBBER June NMCE

Broad Trend: Seen weak.

Near Term: Despite breaching the intermediate resistance at 16320, prices failed to clear the resistance near 16400 levels in the previous session. The lower correction seen thereof is likely to continue for the day but requires clearing 15800 for further downside. As long as 15800 hold the downside, bounce back may be expected. TURNAROUND

Resistances

LEVELS

Supports

16140/16430

16400-15800-15650

15900/15800

16550/16800

15650/15480

16960/17050

15350/15250

 

Source: Geojit Comtrade

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