Thai rubber futures retreated on Tuesday as players took profits from recent gains, influenced by TOCOM, brokers said. Overall volume slipped as 150 contracts of ribbed smoked sheet number three (RSS 3) were traded compared to Monday's 177. The most active June contract settled at 48.10 baht per kg, down from 48.40 baht on Monday, with the number of contracts traded rising to 45 from 42. "Players adjusted positions by taking profit after seeing TOCOM's technical sales," said one broker, referring to the Tokyo Commodity Exchange.

Tokyo rubber futures slipped on Tuesday and were also hit by profit taking after the key contract touched a 10-week high the previous day.

Thai prices are expected to dip further under the pressure of technical factors before rebounding by the end of the week as supplies were tight with the wintering season already under way in eastern Thailand, another broker said.

Brokers see the next technical support at 47.7 baht per kg and resistance at 49.0 baht per kg for distant contracts over the next few days. The wintering season starts in the south, the country's major growing area, in March and runs through to May. Temperatures soar, leaves fall and latex output declines, on average by 30 percent.

The price of unsmoked sheet number three (USS3), the raw material for export-grade rubber sheet, was 42.08 baht per kg on Tuesday, up from Monday's 41.93 baht.

On Thailand's Hat Yai physical market, RSS3 was 43.93 baht, up from 43.72 baht.

On Singapore's SICOM, the RSS3 March contract was steady at $1.22 per kg.

Thailand, the world's top producer and exporter of natural rubber, launched its first commodity futures exchange in May, allowing brokers to trade in RSS3.

Copyright Reuters, 2005