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[Geojit Comtrade] Daily report on Natural Rubber: April 16, 2014

MARKET COMMENTARY

Rubber markets of Kochi and Kottayam in Kerala remained closed on account of Vishu, the Kerala New Year. Trading volumes are expected to be quite low this week amid the festive fervour. There was hardly any trading Monday and the markets will be closed for Good Friday. Rubber futures on TOCOM were trading higher today due to the depreciation of the yen against the dollar and on data showing that the Chinese economy gained momentum in the first quarter. Chinese gross domestic product for the first quarter grew 7.4%, higher than the market estimates of 7.3%. Signs of an improvement in the world’s second largest economy led to optimism for rubber demand in China. On the Tokyo Commodity Exchange, the benchmark September rubber contract was at 219 yen per kg, up 3.5 yen from the previous close.

MARKET NEWS

⊳ Rubber Shipments from Malaysia advance 3.5% in 2013, says Ahmad Hamzah, chairman of Malaysian Rubber Board. Added, domestic consumption increased 3.4% to 724,100 mt; imports jumped 15%.

⊳ Australia’s Bureau of Meteorology said that there is more than 70% chance of the El Nino phenomenon developing during the southern hemisphere winter or Indian summers. The phenomenon usually has a negative correlation with Jun-Sep monsoon rains in India.

⊳China will probably need to ease monetary policy for the first time in two years in coming months to prevent the economy from losing too much momentum, according to economists who doubt the “mini stimulus” announced so far this year can do the job.

⊳Rubber inventories in warehouses monitored by the Shanghai Futures Exchange fell 3.0 percent week-on-week, the exchange said on Friday.

⊳Production from countries representing 93% of global supply may drop 5.5% in March to 749,200 tonnes as growers reduce tapping, responding to low prices, said Association of Natural Rubber Producing Countries.

⊳FMC has permitted NMCE to launch rubber mini contracts of 100 kg, according to the recent circular.

TECHNICAL VIEW

RUBBER May NMCE

Inability to break below 14350 expects a sharp recovery towards 14550 initially followed by 14700 later. Conversely, unexpected drop below 14340 will attract more liquidation in the counter.

TURNAROUND

Resistances

LEVELS

 Supports

14550-14790

15400-14350

14410

14950-15320

14350-14200

15500-15850

14000-13850

 

Source: Geojit Comtrade

Download this report (full content – PDF file) here

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