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Sunday, May 29, 2022

Asia Softs-Tokyo rubber may test resistance

* Tokyo rubber could eye resistance of 290 yen/kg

* Market ignores port strike in Indonesia

By Lewa Pardomuan

SINGAPORE, Dec 23 (Reuters) – Tokyo rubber futures, which set the tone for tyre grade prices in Asia, could test a key resistance on support from a weaker yen, but trading has slowed to a trickle ahead of year-end holidays, dealers said on Monday.

Among other commodities, premiums for sugar could rise, coffee differentials may edge down because of pressure from rising supply, while cocoa-butter ratios are likely to slip as grinders wait for demand to return after the holidays.

The Tokyo Commodity Exchange was closed for a holiday on Monday, having settled 2.3 yen a kg higher at 282.9 yen for the most active rubber contract. It has bounced 26 percent since falling to a nine-month low of 225 yen a kg in June.

“The resistance level will be at 290 yen and the support level is at 253.8 yen until the end of the year,” said Vanessa Tan, an investment analyst at Phillip Futures.

“The biggest surprise is already past us and that is the Federal Reserve’s move of tapering monetary stimulus by $10 billion. We don’t expect major surprises as the year wraps up,” said Tan, referring to the move that had weakened the yen.

Soft commodities shrug off a strike at Indonesia’s biggest port in Jakarta as shipping operations are unaffected. Indonesia is the world’s largest palm oil producer, No. 2 for rubber and robusta coffee and No. 3 for cocoa.

Indonesian robusta premiums may edge lower this week in order to remain competitive as beans in rival Vietnam have changed hands at $10 to $20 a tonne below London futures , reflecting an increase in supply.

The crop in Vietnam is forecast to hit a record 25 million 60 kg bags in the year to September 2014, a Reuters poll showed. Vietnam and second-largest robusta producer Indonesia together account for about 24 percent of global coffee output.

“At this stage and as of December 20th, we believe about 18 percent of the current crop have been sold, equivalent to more or less 280,000-300,000 tonnes,” Herve Touraine, a trader at brokerage house SW Commodities, said in a report.

Source: Reuters

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