NMCE Rubber regains on fresh buying

NMCE rubber futures witnessed heavy volatility on Wednesday. On opening itself prices started trading down on extended selling pressure.
TOCOM futures witnessed small recovery during morning hours but overall bearish sentiments pulled down the prices and futures settled at ¥416.0 per Kg.
However, NMCE futures showed good recovery during second half of the day on active fresh buying on losses. Data released by rubber board regarding lower year end stocks pushed up the prices and futures ended the day on higher note.
The rubbers futures are projected to continue the recovery on fresh buying after huge losses on Thursday. TOCOM August rubber is also trading slightly up at ¥420.30 per Kg on short covering on previous losses.
Thus, on cues from positive international market prices at NMCE plat form may trade on positive note. However, done spot market activity might limit the gains.
Factors to Watch For
According to rubber board of India, Indian February Natural Rubber Output is 54,500 Tons Vs 51,500 Tons, consumption is 79,000 Tons Vs 76,350 Tons and imports are 6,831 Tons Vs 12,278 Tons
As per data released by rubber board, the year end deficit in natural rubber in India is estimated around 1.2 lakh tons and it is expected to be increase to 2 lakh tons during 2011-12
According to the Association of Natural Rubber Producing Countries, Natural-rubber consumption in China and India may rise 9 percent to 3.6 million tons this year and 5.2 percent to 991,000 tons respectively
According to China Passenger Car Association, Sales of passenger cars and minivans declined 0.4 percent from a year earlier to 880,027 last month
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE February contract, prices, volumes and open interest all are rising. Market is attracting larger numbers of traders willing to open positions from the long side and hold them. Traders are more confident that prices will continue to climb in favor of a working long.
Japan Futures (TOCOM)
The TOCOM active August contract, prices are rising while volumes and 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.
Shanghai Futures (SHFE)
The SHFE active July contract, prices and volumes are rising while open interest is falling. Market has a lot of traders initiating from both sides but larger traders may be liquidating into the higher prices. The market may be vulnerable to large price swings as shorter time frame traders attempt to trade from both sides of the market but liquidating before end of- day. Often a signal of a market turns near-term or continued volatility.