NMCE Rubber slumps on profit selling

NMCE rubber futures traded down on active selling interest on previous gains on Tuesday. Futures started the day on positive note on extended buying. However, profit selling on huge gains pressurized the prices.
However, positive trend in domestic spot and International market also supported the prices to recover. Rubber futures at TOCOM were ended on positive note at ¥446.00 per Kg. Thus, on overall positive cues futures at NMCE recovered but recovery was not enough to and prices ended the day in red.
The rubbers futures are projected to continue the losses on active profit selling initially on Wednesday. However, TOCOM August futures are trading positive at ¥436.00 per Kg. on active buying interest.
Reports of decline in shipment from Thailand as Japanese auto manufacturing companies have resumed their activity are likely to support the prices. Overall market trend is looking positive on supply concern which might support the prices to bounce back later in the day.
Factors to Watch For
As per deputy head of the China Rubber Industry Association, Natural-rubber demand in China, the biggest consumer, will rise 8% this year. Consumption will be 3.24 million metric tons, while tire output will climb 7.9 percent to an all-time high of 453 million units
As per the Committee on rubber policy of Thailand Government, Thai government will negotiate with commercial banks to extend loans to exporters to buy rubber from farmers at a minimum price of 120 baht per Kg
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 Rubber Research Institute of Thailand, ribbed smoked sheet prices gained for a fourth day, up by 6.4 percent to 162 baht a kilogram on Monday
According to the Association of Natural Rubber Producing Countries, Consumption in China, India and Malaysia, representing 48% of global usage, will increase this year
DERIVATIVE ANALYSIS
Indian Futures (NMCE)
The NMCE March contract, prices are falling while volumes and open interest are rising. If prices are in a downtrend and open interest is on the rise, chartists know that new money is coming into the market, showing aggressive new short selling. This scenario will prove out a continuation of a downtrend and bearish conditions.
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 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 that correction will be bought creating a buy point for uptrend.