* TOCOM rubber sees support at 185.30 yen/kg
* Thai sugar discounts narrow, no improvement in sentiment
By Lewa Pardomuan
SINGAPORE, Sept 15 (Reuters) – Global benchmark Tokyo rubberfutures may rebound from recent 5-year lows this week but couldalso resume the downtrend on pressure from ample supply and thesale of Thailand’s stockpile, industry sources said on Monday.
Among other soft commodities, Thai raw sugar discounts couldnarrow after New York futures plunged to four-year lows, whileVietnamese robusta prices may fall further ahead of the nextcrop season. Cocoa butter could stay at current levels beforeyear-end demand picks up again.
Markets in Japan were closed on Monday for a holiday. Themost active rubber contract on Tokyo Commodity Exchange rose 2.3 yen to settle at 190.2 yen a kg on Friday, havingplunged to a five-year low of 186.3 yen last week.
TOCOM rubber may hover above a support at 185.30 yen for afew days or rebound moderately to 196.70 yen before breaking thesupport level, according to Reuters market analyst Wang Tao.
The contract will fall further towards 166.90 yen over thenext four weeks, he added.
Tokyo futures have fallen more than 30 percent so far thisyear, hurt by worries about China’s economy and recently byThailand’s decision to sell the country’s 200,000-tonne rubberstockpile.
“There’s no change in terms of poor demand outlook. We learnthat top consumer China has been getting cheap rubber fromVietnam, Myanmar and Laos and Cambodia through border trade,”said Edy Irwansyah, executive secretary of the North Sumatranbranch of the Indonesian Rubber Association.
“Production in those countries is increasing and so issmuggling. That’s what we heard.”
In the sugar market, early indications showed Thai highpolarisation raw sugar was offered at 20 points below New Yorkfutures from 35 points last week. But the improvement wasmainly driven by a drop in New York as differentials and futuresusually move in opposite directions.
“Raw sugar prices have been savaged over the past few weeks,with a complete capitulation last week, and maybe more to come,”said research and analysis firm Green Pool Commodities.
“What initially was a reversal of a large fund long to shortseems now to have been enjoined by substantial trade andproducer selling.”
ICE raw sugar sank to a more-than-four-year low in heavytrade on Friday, extending a rout on plentiful near-termsupplies as Brazil harvests a big crop and global inventoriesswell. (Editing by Sunil Nair)
