* TOCOM rubber in 190-200 yen/kg range this week
* Thai hipol raws seen at 20 pts below NY
* Cocoa butter prices under pressure
By Lewa Pardomuan
SINGAPORE, Aug 18 (Reuters) – Tokyo rubber futures, which set the tone for tyre-grade prices, are likely to trade in a tight 10-yen range this week as worries about demand from top consumer China prompt speculators to ditch contracts, dealers said on Monday.
Among other soft commodities, Thai raw sugar prices will stay below New York futures as sellers struggle to find buyers, Indonesian robusta premiums show no signs of weakening, and cocoa butter ratios may weaken further this week.
The most active January rubber contract on Tokyo Commodity Exchange dropped to its weakest since June at 195 yen a kg on falling crude oil prices and higher stockpiles in China. The contract has plunged about 28 percent this year.
“If physical prices continue going down, then we can’t hope for the futures market to go up. Sentiment is bearish. Buyers are just looking to wait and see, and they are just buying things they need,” said Gu Jiong, an analyst at Yutaka Shoji Co in Tokyo.
“They won’t stock up. This week’s trading range is 190 to 200 yen.”
The TSR20 contract on Singapore’s SICOM exchange, which covers Thai, Indonesian and Malaysian grades sank to a four-month low on Monday, reflecting a depressed physical market and abundant rubber supply.
Ample supply, fierce competition from rival Brazil, and a lack of demand could keep Thai raw sugar at 20 points below New York futures for prompt shipment, but bids may be much lower at 70 to 100 points.
“While some other commodities are under pressure, and summer tends to be quiet in sugar, this commodity is beset by high stocks, production advances and slow overall purchasing,” said Research and analysis firm Green Pool Commodities.
In August last year, Thai hipol stood as high as 130 points, or 1.3 U.S. cents a pound, above futures as millers processed more whites to take advantage of firm demand from the Middle East and rising processing margins.
In coffee, Vietnamese robustas may be sold at discounts of $50 to $60 a tonne to London futures, unchanged from last week, as sellers clear stocks before the next harvest in October. Indonesia will keep prices at $30 to $40 above futures on hopes of strong demand from local roasters.
Indonesia’s coffee output is likely to plunge to a three-year low in 2014/15 due to adverse crop weather, while higher domestic consumption will soak up about half the produce, a Reuters survey showed.
In the cocoa market, grinders may further cut butter ratios from last week’s 2.40 to 2.50 times London futures <0#LCC:> to entice chocolate makers to do “combo” deals.
In “combo” or combination deals, grinders pair the sales of butter and powder to prevent a build-up in stocks. Grinders sell butter at a fixed, but smaller, ratio on condition the buyer also takes some powder.
(Editing by Joseph Radford)
– Reuters
