Benchmark TOCOM rubber futures surrendered some of the previous day’s gains on Wednesday (Apr 9) as a firmer yen and tumble in Japanese equities offset support provided by overnight gains in oil prices for the soft commodity.
FUNDAMENTALS
The Tokyo Commodity Exchange rubber contract for September delivery was down 1.0 yen at 224.4 yen per kg by 0010 GMT, after finishing 4.2 yen higher on Tuesday (Apr 8).
Severe drought in Thailand is expected to reduce production of commodities such as rice and rubber, the agriculture minister said on Tuesday (Apr 8), cutting export earnings at a time when economic growth is under pressure from a political crisis.
After years of massive expansion, tearing up forests and swallowing land in neighbouring countries to create rubber plantations, Vietnam is reaping what it sowed: a swelling of output that has made it the third-largest rubber producer. Vietnam’s burgeoning output could spark a price war later in year in a market already at multi-year lows.
The International Monetary Fund on Tuesday (Apr 8) predicted the global recovery would strengthen this year and next as output in richer nations picked up, but it warned of rising risks in emerging economies
MARKET NEWS
The U.S. dollar was quoted around 101.95 yen early on Wednesday (Apr 9), edging up a day after it posted its biggest one-day fall in over seven months against the Japanese currency on remarks from the Bank of Japan that dismissed any need for additional stimulus.
Japan’s benchmark Nikkei stock average dropped 1 percent in Wednesday (Apr 9) trade, as the firmer yen weighed on sentiment for exporters.
U.S. crude oil prices rose more than 2 percent on Tuesday (Apr 8) in a technical-driven rally boosted by a weaker U.S. dollar and forecasts for a draw on stockpiles of domestic oil products.
Reuters
