NMCE Rubber gains tracking TOCOM futures

NMCE rubber futures reversed the trend on fresh buying at lower level on Wednesday. TOCOM futures market also traded up on short covering and September futures settled at ¥425.20 per Kg.
Domestic spot market also witnessed recovery after a continuous fall which supported the futures prices to trade higher. Therefore, taking cues from domestic spot and international market futures ended the day on higher note.
The rubbers futures are projected to continue the recovery on lower level buying on Thursday. However, TOCOM September futures are trading slightly down at ¥413.00 per Kg. on fresh selling on gains.
Concern of demand may decline from US as they have cut government spending which is likely to weigh on prices. Thus, in Indian market overall trend is likely to be very volatile.
Factors to Watch For
According to Bloomberg sources, China’s is likely to increase the interest rate for 5th time on rising concern of inflation
Decision of reduction in government spending by Us is also pressurizing the prices as demand for commodity used in auto industry is likely to decline
According to Department of Disaster Prevention & Mitigation, around 19,641 acres of rubber plantations have been damaged in Thailand due to heavy flood
According to the Rubber Research Institute of Thailand, The physical price of Thai rubber dropped to 177.3 baht ($5.89) a kilogram Tuesday
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE May contract, prices and open interest are falling while volumes are rising. prices and open interest are rising while volumes are falling. Market is attracting late buyers & early shorts; market is vulnerable to a sharp correction but likely that correction will be bought creating a buy point for uptrend.
Japan Futures (TOCOM)
The TOCOM active September contract, Prices, volumes are falling while open interest is rising. It is a good indication that a sharp rally against downtrend will develop creating a sell point for downtrend.
Shanghai Futures (SHFE)
The SHFE active August contract, prices are rising while volumes and while open interest are falling. Market is running out of traders willing to open or hold an open long/buy. Traders are liquidating both loosing short positions & closing winning long positions. A higher probability the market is set to retrace in price lower at some point forward.
Courtesy: Karvy Commtrade Ltd.