Thai rubber futures rebounded on Wednesday as players covered short positions, brokers said. Overall volume roses as 290 contracts of ribbed smoked sheet number three (RSS3) were traded compared to 228 contracts on Tuesday. The most active April contract settled at 48.2 baht per kg, up from 48.0 baht on Tuesday, with the number of contracts traded rising to 87 from 36.
"Prices went up due to short-covering as players believed that they had reached the bottom," said one broker. Poor sentiment was expected to choke off the rebound over the next few days on expectations that good weather will increase domestic supplies, brokers said.
Southern Thailand, which produces about 90 percent of the country's natural rubber and where the rainy season began last month, has had little rain for a second week, allowing farmers to go out tapping.
The wet season usually and usually runs through November. The price of unsmoked sheet number three (USS3), the raw material for export-grade rubber sheet was at 42.33 baht per kg, almost the same as on Tuesday.
On Thailand's Hat Yai physical market, RSS3 was quoted at 43.96 baht per kg on Wednesday, up slightly from 43.94 baht. On Singapore's SICOM, the RSS3 December contract was at $1.19 per kg on Wednesday, down from $1.20 on Tuesday.
Thailand, the world's biggest natural rubber producer and exporter launched its first commodity futures exchange in May, allowing brokers to trade in RSS3. December, January, February, March, April and May contracts were offered.
Each contract is for five tonnes. Trading hours is 10:30 am 15.00 noon (0330 to 0800 GMT).
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