On May 31, the distant month rallied to 75.50 yen on short-covering and fresh buying by some trading houses. On June 2, the distant month closed at 74.80 yen with players staying on the sidelines as the news on the increase in supplies by the weather improvement in Thailand was reported. Furthermore, the fact that the meeting of the government officials from the major rubber producing countries was postponed again added to the weak sentiment.
Market players seem to take a wait-and-see attitude due to the poor demand for rubber and to the physical prices hovering around the lower level.
This week's volume in RSS3 futures market totaled 29,932 lots. The open interest decreased by 10,644 lots to 29,446 lots as of June 2 from 40,090 lots as of May 8.
At the beginning of the week, on May 29, taking over the weak sentiment from the previous week, all contract months in OME Rubber index futures fell below the 70 point level on long-liquidation and bears' selling due to the yen's strength and to the easier tone in the producing countries. Distant month went down by 1.70 to 68.80.
On May 30, however, the prices rebounded sharply on hurried short-covering for profit taking due to the concerns over the extended falls for the last five consecutive days. Distant month surged to the day's limit-high at 71.00. Thereafter, players remained to be cautious of the lower level amid the widened spread between OME RSS3 futures and Thai offer prices as the extent of the fall in RSS3 futures was larger than that in Thai offer prices. Meanwhile, the weaker Indonesian rupiah weighed on the physical prices of the producing countries. With these bullish and bearish factors, toward the weekend, the prices continued to fluctuate within a narrow range on light buying mingled with selling.
"The day's limit high on May 30 was probably a knee-jerk reaction to the recent downward move. As the market lacks market-moving factors, the prices will be contingent upon the ovement of the yen in the short term," a trader said.
This week's total volume of trading totaled 28,391 lots. The open interest totaled 29,342 lots as of June 2.