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

MARKET COMMENTARY

 ⊳ RSS4 in the Indian market traded rather steady with a positive bias last week. In the physical market, the grade was quoted between Rs.184-186 a kg while on NMCE, the near month September rubber futures posted gains for the first time in three weeks. Gains in overseas market coupled with volatile movements in currency supported the sentiments amidst restricted arrivals. However, South-west monsoon weakening over Kerala and anticipation on improvement in arrivals in coming days weighed on prices. According to sources, tapping activities have resumed in some of the natural rubber growing areas in Kerala although it is yet to resume in full swing.

⊳ TOCOM rubber futures bounced back on Monday bolstered by strong Chinese industrial production data. China manufacturing PMI released yesterday, rose to 16-month high, lessening further the concerns over hard landing of the economy. SHFE rubber futures

MARKET NEWS

 ⊳ Protests continues in Thailand on low natural rubber prices, government sops to pacify the farmers provides little relief.

⊳ Rubber inventories in the warehouses monitored by SHFE dropped 5.1 per cent to 118440 tonnes last week.

⊳ Thailand plans to spend 30b baht to support rubber industry, aiming to boost prices and reduce supply, Deputy Prime Minister Kittiratt Na-Ranong says. Govt to spend 15b baht to provide low-interest loans to producers of rubber products who want to buy new machinery or improve productivity, 10b baht to subsidize production costs for farmers nationwide and 5b baht to provide low-interest loans for farmer groups to process rubber.

⊳ TOCOM August rubber futures expired with 126 lots being delivered as against 565 lots delivered in July.

⊳ Thai Finance Ministry is seeking a budget of 25 billion baht to help rubber farmers cope with decreasing prices of rubber in the world market.

⊳ Rubber farmers from northern Thailand plan to stage a mass protest on Sept 3 if the government does nothing to prevent rubber prices from sliding further.

⊳ Crude rubber stockpiles held at Japanese warehouses fell 10.6 percent to 7,571 metric tons on Aug. 10, according to data from the Rubber Trade Association of Japan.

TECHNICAL VIEW

 RUBBER Sep NMCE

Support at 18200, if held downside may call for a bounce back towards 18700-18800 ranges but requires clearing the same for further upsides. Slippage past 18200 could call for lower corrective move towards 18050-17800 levels.

TURNAROUND

Resistances

LEVELS

 Supports

18550/18700

18800-18200-17800

18200/18050

18800/18970

17900/17800

19250/19380

17600/17500

 

Source: Geojit Comtrade

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