Rubber declined after reaching a 27- month high yesterday as the dollar strengthened to a one-week high against the euro, cutting the appeal of the commodity. The April-delivery contract declined as much as 1.1 percent to 336.5 yen per kilogram ($4,124 a metric ton) in Tokyo after climbing to 343.3 yen yesterday, the highest level since July 2008. Shanghai futures plunged as much as 2.8 percent to 31,750 yuan ($4,754) a ton from a record 33,320 yuan yesterday. “The strong dollar cut the appeal of commodities, pulling rubber prices lower,” Chaiwat Muenmee, analyst at commodity broker D.S. Futures, said by phone from Bangkok. The dollar rose to a one-week high against the euro amid speculation more debt purchases by the Federal Reserve will help revive economic growth. The dollar gained as high as $1.3816 per euro, the most since Oct. 20, before trading at $1.3833 per euro in Tokyo from $1.3859 in New York yesterday. U.S. orders for goods meant to last at least three years climbed 2 percent in September, the most in five months, according to a Bloomberg survey of economists before the Commerce Department report today. Separate data may show new- home purchases rose 4.2 percent last month to a 300,000 annual rate, up from the record-low 282,000 in May, economists forecast. The U.S. economy probably grew at a faster pace in the third quarter. Gross domestic product rose at a 2 percent annual pace, up from a 1.7 percent rate in the previous three months, according to the median forecast of economists surveyed by Bloomberg News before the Oct. 29 Commerce Department report. Supply Tightening Rubber losses may be limited as reports on tightening supply should support prices, Chaiwat at D.S. Futures said. Rain continues to disrupt tapping among key producers, he said. A natural rubber supply shortage will likely “worsen” in the fourth quarter as unseasonal rainfall continues to disrupt production from key growers, the Association of Natural Rubber Producing Countries said. Output in Thailand, the largest producer and exporter, is estimated to fall 3.9 percent in the fourth quarter to 933,000 tons, the group said in a monthly bulletin. Output in China and India is expected to contract during October to December because of heavy rain, the group said. India has scaled down its production forecast this year to 844,000 tons from 879,000 tons estimated earlier, while China cut its 2010 output forecast to 641,000 tons, a decline of 0.3 percent from the previous year, the group said. Global rubber production this year is unlikely to increase more than 5.3 percent to 9.4 million tons, from a previous forecast of 6.3 percent, the association said. A further cut in output is expected because of tapping disruptions in Malaysia, Thailand and India, the group said. “Marked change in supply scenario is remote in 2011 given the fact that yielding area is unlikely to expand before 2012,” Jom Jacob, the group’s senior economist, said in the statement. To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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