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Osaka Mercantile Exchange RSS3 Futures/Rubber Index Futures Weekly Report

Date 15/02/2000

Distant month: opening 83.90 yen, a high 92.00 (Feb. 8), low 83.90 yen (Feb. 7), closing 89.50 yen. On February 7, OME RSS3 futures market opened firmer on short-covering and buying by bulls in line with the surge in the gold and the other domestic commodities across the board. The feeling that the OME prices were relatively lower than the physical prices also helped the rise. Distant three months hit the daily limit-highs. On the next day, it was reported that the Japanese rubber stocks increased over the high recorded at 47,835 tonnes in August 1999 to 47,918 tonnes. This news, however, was ignored by market participants and current month and distant month advanced further to 78.70 yen and 92.00 yen, respectively, due to the yen's sharp fall to the 109 yen level. On February 10, the distant month turned lower to 88.60 yen on selling for profit-taking due to the less-than-expected gain in the physical prices after the Lunar New Year holidays and the concern over the sharp rise in domestic rubber prices. Bulls are expecting a further dip after the sharp rise last week, a trader said. This week's total volume in RSS3 futures market was 29,137 lots. The open interest was 31,823 lots as of February 10. This week, OME Rubber Index Futures extended its gain of the previous week on buying at a dip caused by the concerns about the overbought conditions. Distant month : opening 78.60 points, a high 81.90 points (Feb. 10), a low 78.60 points (Feb. 7), closing 81.90 points At the beginning of the week, despite during the Lunar New Year's holiday in the producing countries, OME Index Futures opened higher on short-covering in line with the surge in the precious metal markets. Distant month went up to 79.20. Later, the news on the rise in the Japanese rubber stocks as of January 31 over the peak of August 1999 failed to weaken the rubber market. All contract months except current month soared to the day's limit-high on February 7 and 8 due to some contract months in RSS3 Futures hitting the daily limit-highs and to the dollar's rise over the 109 yen level on the difference between the economic strengths of U.S. and Japan. As per the Market Management Guidelines, when the closing prices of more than three contract months hit the day's limit for two consecutive days, the contingent additional margin of extra 3,000 yen is required for holding positions from the same day. With this requirement, the prices fell on selling for profit-taking with concerns over the higher level. On February 10, distant month recorded its life time high on strong and renewed buying at a dip. As the recent sharp rise is not the result of leads specific to the rubber market, but largely on active short-covering due to the soaring prices of other commodities, the open interest has been decreasing marginally. It is doubtful whether distant month will surpass the high at 82.60 of November 14, 1999, a trader said.