Osaka Mercantile RSS3 Futures And Rubber Index Futures Weekly Report

RSS3 Futures: Distant month: opening 84.50 yen, a high 89.20yen (Nov. 4), low 83.70 yen (Nov. 5), closing 86.00 yen. On November 1, the spot month and distant month opened easier at 73.10 yen and 84.50 yen down 0.1 yen and 0.7 yen, respectively, from the Friday's close as buyers hesitated to build new positions reflecting the yen's strength. Amid the heavy rains in Malaysia and Thailand, the prices in the producing areas advanced further as the supply in Indonesia was becoming tight on the keen demand from U.S. and European buyers. With these factors, on November 4, distant contract turned higher to 89.20 yen on short-covering and buying by bulls. On November 5, however, the distant contract briefly declined to 83.70 yen on profit-taking as players became cautious over the higher level due to the lull in the markets of the producing areas and to the Relative Strength Index (RSI) around the 70 point level indicating an "excessively-bought market". At the close, the distant contract recovered 85.60 yen on buying at a dip. As the OME prices are significantly lower than the prices offered in Thailand, the OME prices will be steadier next week, a trader said. This week's total volume in RSS3 futures market was 32,976 lots. Open interest was 34,713 lots as of November 5. This week, OME Rubber Index Futures fluctuated violently. Distant month : opening 78.65 points, a high 82.60 points (Nov. 4), a low 78.35 points (Nov. 1), closing 79.80 points. At the beginning of the week, taking over the strong sentiment from the end of the last week, distant month in OME Rubber Index Futures opened 0.45 higher at 78.65 from the Friday's close on short-covering. On November 2, all contract months, except the nearby November contract that had no limit restriction, surged to the day's limit-highs due to the continued upward trend in the producing countries. Distant month rose over the 80 point level for the first time in the last eight months. On November 4, all contract months except the nearby month, opened hitting the day's limit-highs on extended buying interest. Later on the same day, however, the players grew cautious of the higher level, and the prices became easier on profit-taking and distant month closed at 81.25, down 1.35 from the opening price. Also, as per the Market Management Guidelines, the contingent additional margin of extra 30,000 yen is required for taking fresh positions from the next day, should the closing prices of more than three contract months hit the day's limit for two consecutive days. The recent gain, renewing life time highs for the past few days, made this requirement imminent and it seemed that longs were encouraged to liquidate their positions while bulls became hesitant to build up fresh positions. Toward the end of the week, the prices turned sharply lower on bears' selling due to the lull in the producing countries and to the stagnant trading in the OME RSS3 futures. Distant two months briefly sank to the day's limit-lows. Buyers are leading the market. They will start building new positions again at the dip after a round of selling for profit-taking, some traders said.