NMCE Rubber Intraday Outlook

Commodities Technical Analysis | NMCE Rubber Intraday Outlook | 31 August 2009 | www.commodityonline.com

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Rubber futures in NMCE advanced further on Saturday on good buying support. Domestic rubber futures surged around 6 percent last week as rallies in crude oil and stocks boosted optimism for an economic recovery, increasing demand for the commodity used to make tires.

A government board in India expressed confidence that, rubber production in India, the world’s fourth-biggest grower, will increase from September and meet a target for a full-year gain as latex yield improves during cool weather.

Natural rubber production in India dropped 10.9 per cent during the first seven months of the current year. Production was 8.32 lakh tonnes of rubber during the 12 months to July, which was a 5.6 per cent fall over the corresponding period of last year.

The imports of rubber stood at 51,000 tonnes on July 9, and that compared with 21,000 tonnes imported during the same period of last year. Exports, on the other hand, stood at just 1,000 tonnes compared to 15,000 tonnes. Lower exports and higher imports have pushed up the stock level to 1.9 lakh tonne by the end of June as compared to 1.4 lakh tonne during the same period last year.

Meanwhile, global rubber production registered a fall of 4.6 per cent till July. Malaysia registered 17 per cent fall. Production fell by 12.4 per cent in Thailand during the six month period. Indonesia’s natural rubber output fell by six per cent during the first half of the year. Vietnam witnessed a 7.3 per cent fall in January-July period. The Vietnam Rubber Association expects a five per cent production shortfall to persist until October.

China and Sri Lanka are the only two countries to show a growth in production and have helped to cu shion the global shortfall. China has recorded a 54 per cent growth in production.

NMCE rubber moved in the range of Rs11020-10925 last traded at Rs.11005 (10919) Open interest decreased by 9 to 1213. Rubber stocks at NMCE accredited warehouses increased by 22 to 160 Mt.

INTRADAY OUTLOOK

NMCE Rubber September futures support lies at 109.45 and 108.88. Resistance is at 110.45 and 110.78.