Tokyo rubber futures dropped on Thursday morning after an early rise due to profit taking despite bullish trends in other commodities, dealers said. At 0429 GMT, the benchmark March 2007 contract was down 0.8 yen at 233.4 yen ($1.96) per kg from Wednesday's 234.3 yen.
"It's probably due to the oil and gold prices last night that supported prices in early trade," an Tokyo-based dealer said. "But prices stuck, facing profit taking by players who bought contracts when they were around 230 yen," he added. The October contract expired on Wednesday and the April contract was offered for the first time on Thursday at 236.1 yen per kg.
"I think prices should rise further as gold and oil are in a bullish trend," a Singapore-based trader said. Gold rose to its highest in nearly a week on Thursday after crude oil moved up towards $62 a barrel following a surprise drop in US crude stocks. Trading volume on the TOCOM futures market was thin as only small investors were active.
"I think funds should come back into the market later next week when rubber futures have some direction," a trader said. Physical rubber prices were barely changed, but were expected to rise a little next week due to supply worries following reports of rain in Thailand and floods in Malaysia, traders said. "It's still raining in Thailand and Malaysia and that raised concerns about limited supply over the next week," one said.