[Geojit Comtrade] Daily report on Natural Rubber: November 29, 2012

MARKET COMMENTARY

RSS4 in the Indian market is seen retreating after bouncing back from its lowest since late-August last week. NMCE remained closed on Wednesday on account of Gurunanak Jayanti, while in the physical market, quotes for RSS4 lower for the third consecutive day. Prices were under pressure from decline in natural rubber prices in the overseas market amidst the peak production season. Muted demand from the major natural rubber consuming industry too weighed on.
Concerns over demand from China and global macro economic uncertainty continued to build pressure on natural rubber prices in the international market. A mixed trend is being witnessed on Thursday, while TOCOM rubber futures rose from the one week low tracking equities and weak yen; SHFE rubber futures extended the previous session losses. Burgeoning natural rubber stockpiles in China is raising worries over demand from the top consumer.

TECHNICAL VIEW

Rubber stocks held by Thai Govt stand at 170000 tonnes and are expected to rise to 410000 tonnes by March-end.
According to Vietnam’s General Statistics Office, November rubber exports may drop 25% on YoY basis to 95,000 tonnes
Rubber Board aims to expand total area under natural rubber cultivation to 4.0 lakh hectares by 2017.
Crude rubber stockpiles held at Japanese warehouses rose 15.5 percent to 6,739 metric tons on Nov. 10, according to data from the Rubber Trade Association of Japan.
Traders in China are increasing imports of the natural variety from Thailand as expectations of stockpiling by the Chinese government push up domestic prices.
Rubber inventories in the warehouses monitored by SHFE jumped 35.5 per cent to 90325 tonnes the previous week to hit two and a half year high.
Thailand, the world’s biggest rubber producer, will expand a statebuying program by more than doubling purchases from farmers to support higher prices, according to Deputy Farm Minister.

TECHNICAL VIEW

RUBBER Dec NMCE

While prices have been correcting lower in the last two sessions, 17400 if held downside is likely to call for a brief bounce back possibly towards 17600-17700 levels. However, Slippage past 17400 may call for 17260/17100 or more. Now prices require clearing the strong resistance region of 17960- 18100 to strengthen the buying momentum.

Source: Geojit Comtrade

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