Tokyo rubber futures rose on Monday due to fresh buying from funds and short covering by speculators. The benchmark March 2007 contract rose 5.1 yen to 228.0 yen ($1.91) per kg, from Friday's 222.9 yen.
"Prices fell to a level that was attractive for funds to buy," said a Singapore-based trader. Prices were also supported by gains in other commodity futures, especially gold and oil, dealers said. Gold firmed on Monday as crude oil rose above $59 a barrel after Opec called an emergency meeting later this week on output cuts.
TOCOM prices rebounded after falling last week, but would struggle to get past 230 yen per kg, a key resistance level, traders said. "Prices could not fall below 200.0 yen last week, that's why they rebounded," said a Tokyo-based dealer. "Let's see whether it can break 230.0 yen."
The rise in TOCOM prices had little impact on the physical market where there were few buyers. Supply concerns were likely to keep physical prices firm this week.
Heavy rains in Thailand and Indonesia, the world's number-one and number-two rubber producing countries respectively, have disrupted tapping and raised concerns about falling supplies. Thailand's worst flooding in 11 years in the north and central regions has killed up to 56 people, and rain was expected to move south into the country's main rubber producing areas.
"Rains have started to fall in some parts of south-eastern Thailand. Supply for the whole region is expected to fall by at least 30 percent," said Hat Yai-based trader.
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