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[Geojit Comtrade] Daily report on Natural Rubber: Aug 20, 2013

MARKET COMMENTARY

Sentiments stayed feeble in the local natural rubber market. On Monday, RSS4 slipped further in the physical as well as in the futures market. The grade was quoted around Rs.186 a kg, its weakest level in about one and a half month on improving climatic conditions as well as expectation of pick up in supplies in coming days. According to market sources, tapping has started in certain areas in Kerala, though it is yet to resume in full swing.

Natural rubber in the overseas market was in red on Tuesday. TOCOM rubber futures stretched the previous session losses and were off the two month high hit last week tracking weak equities and crude oil. Overall market sentiments were hurt by uncertainty prevailing over tapering of the US Federal Reserve’s bond buying program. SHFE as well as AFET rubber futures followed the suit too.

MARKET NEWS

Rubber inventories in the warehouses monitored by SHFE rose 3.8 per cent to 122645 tonnes last week.

The Thai government planned to spend 30 billion baht to support farmers and rubber processors, Deputy Prime Minister Yukol Limlamthong said Aug. 15.

Rubber inventories in Qingdao, China’s main hub for the commodity fell to 298,300 metric tons from 313,100 tons on July 31 according to the Qingdao International Rubber Exchange.

Natural rubber production in India tumbled 32.4 per cent in July to 46000 tonnes and consumption dropped 3.75 per cent to 82500 tonnes on year on year basis. In the mean time, imports jumped 39.2 percent to 29311 tonnes during the same period.

Crude rubber stockpiles held at Japanese warehouses fell to 8470 tonnes as of July 31 to its lowest in about seven months, according to data from the Rubber Trade Association of Japan.

China imported 150000 tonnes of natural rubber in July compared to 129827 tonnes imported during last month.

ANRPC sees natural rubber imports by China rising 6.6 per cent in 2013 to 3.59 million tonnes.

Indonesian Agricultural Ministry expects 2013 natural rubber output to be at 3.18 million tonnes against the previous estimate of 2.77 million tonnes.

TECHNICAL VIEW

 RUBBER Sep NMCE

Likely to continue the previous session decline towards 17500 initially, which if held may call for a mild pullback. However, sustained trades below the same may see weakness stretching towards 17380-17250 or even more.

TURNAROUND

Resistances

LEVELS

 Supports

17850/18000

18300-17500

17500/17380

18150/18300

17250/17100

18500/18700

16900-16800

 

Source: Geojit Comtrade

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