Tokyo Futures Flat, Weak Oil Hurts Sentiment

Key Tokyo rubber futures were nearly flat in range-bound trade early on Tuesday (May 31), with many investors sidelined due to a lack of strong market-moving factors, while lower oil prices and the yen's gradual rise hurt sentiment.
FUNDAMENTALS
The key Tokyo Commodity Exchange rubber contract for November delivery was down 0.3 yen at 390.1 yen as of 0030 GMT.
The most active Shanghai rubber contract for September delivery fell 195 yuan to settle at 32,555 yuan ($5,013.796) per tonne on Monday (May 30).
The dollar was steady against the Japanese yen at 80.87 yen but has retreated since hitting a three-week peak of 82.23 yen earlier in May amid signs that growth in the U.S. economy is losing momentum.
Brent crude oil fell below $115 a barrel on Monday (May 30), heading for its first monthly decline this year, as investors weighed the prospect that Europe's debt crisis and a sputtering U.S. economy may slow demand.
Interest by tyre makers in forward rubber shipments stirred up physical trade on Monday (May 30), dealers said, but top buyer China stayed on the sidelines by dipping into domestic inventories.
MARKET NEWS
Indian tyre makers are scouting for rubber plantations and devising a more profitable product mix in order to arrest a decline in margins, resulting from an unrelenting surge in rubber prices amid fears of a slowdown in the auto market.
The Nikkei average was flat in early trade on Tuesday (May 31) as concerns about the global economy and weaker-than-expected industrial output data were offset by bargain hunting.
(Reuters, May 31, 2011)