NMCE Rubber plunges on short selling

NMCE rubber futures traded down on strong selling interest on Saturday. On opening itself prices started trading down on extended selling. Domestic spot market also witnessed a huge fall in prices on sluggish demand.
News of tsunami in Japan weighed on sentiments and prices in all rubber market across the world fell drastically on huge selling pressure and futures at NMCE ended in red.
The rubbers futures are projected to continue the losses on active selling on Monday. TOCOM August rubber is also trading down at ¥384.10 per Kg on active selling. Domestic spot market at Kochi and Kottayam also witnessing the same down trend. Thus, on cues from negative international market prices at NMCE plat form may trade on lower note.
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 Rubber Research Institute of Thailand, physical price of Thai rubber shed 1.5 percent to 189 baht ($6.18) a kilogram yesterday
According to the Association of Natural Rubber Producing Countries, Consumption in China, India and Malaysia, representing 48% of global usage, will increase this year
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 March contract, prices, prices, volumes and open interest all are falling if the total open interest is falling off and prices are declining, the price decline is being caused by disgruntled long position holders being forced to liquidate their positions.
Japan Futures (TOCOM)
The TOCOM active August contract, prices and open interest are falling while volumes are rising. Market is running out of traders willing to open or hold an open Short/Sell. 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 open interest are falling while volumes are rising. Market is running out of traders willing to open or hold an open Short/Sell. 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.