MARKET COMMENTARY
Rubber prices in wholesale markets ended unchanged Monday mainly due to subdued demand for the commodity. Rubber has been trading in a narrow range for almost a month, as volumes stayed low. Rubber futures on TOCOM were lower Wednesday due to profit booking after prices ended higher Tuesday tracking the upside in benchmark futures on the Shanghai Futures Exchange. Moreover, concerns over a supply glut in the market and weakness in Chinese economy continues to weigh on prices. The benchmark September contract on the Tokyo Commodity Exchange was near low at 223.3 yen per kg, down 2.1 yen from the previous close. The contract has touched an intraday high of 226.8 yen and a low of 222.3 yen so far today.
MARKET NEWS
⊳ 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.
⊳Amid signs of economic concerns, China acted for the first time this year to steady its stumbling economy by cutting taxes for small firms and announcing plans to speed up the construction of railway lines earlier this week.
TECHNICAL VIEW
RUBBER May NMCE
Even though weak bias persists in the counter, expect a mild recovery as it cleared the upside obstacle of 14640. For the day, prices likely to move up but breaking 14950 is least anticipated. Further selling pressure may be seen only on a break below 14450.
TURNAROUND
|
Resistances |
LEVELS |
Supports |
|
14790-14950 |
15400-14350 |
14450 |
|
15320-15500 |
|
14350-14200 |
|
15850/16000 |
|
14000-13850 |
Source: Geojit Comtrade
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