Natural rubber futures advanced for a seventh day to the highest in more than two months as crude oil gained and equities jumped, boosting demand prospects for the commodity used to make tires. Crude oil and U.S. equities rose on investors’ speculation that an Obama administration plan to rid banks of toxic assets will revive economic growth, boosting demand for commodities. Asian equities extended gains today, with the MSCI Asia Pacific Index advancing 1.6 percent. “Rubber was supported by oil prices and stocks in the U.S., which boosted investment sentiment,” said Kazuhiko Saito, an analyst at Tokyo-based commodities broker Fujitomi Co. Wheat, corn and soybean futures also gained today. Rubber for August delivery, the most-active contract, added as much as 2.6 percent to 152.6 yen a kilogram ($1,560 a metric ton), the highest since Jan. 19, on the Tokyo Commodity Exchange, and was at 149.7 yen at the 11 a.m. Tokyo time break. “Investors are riding a tide of euphoria over the U.S. plan,” said Mamoru Shimode, chief equity strategist at Resona Trust & Banking Co. Treasury Secretary Timothy Geithner said the government will finance as much as $1 trillion in purchases of banks’ distressed assets to unfreeze credit markets. Crude oil for May delivery traded at $53.70 a barrel at 11:49 a.m. Tokyo time compared with yesterday’s intraday high of $54.05. A rise in crude oil often pushes synthetic rubber prices higher and makes natural rubber more attractive. Coleman’s Forecast To be sure, free-on-board natural rubber may slump to less than $1,000 a ton as producers’ efforts to buoy prices may fail to counter the impact of the global recession, according to a forecast from Mike Coleman at Aisling Analytics Pte. “The cost of stabilizing prices in the short term is you reduce prices in the long term,” Managing Director Coleman said late yesterday in an interview. “They are stabilizing rubber at too high a price.” Rubber trades at about $1,400 a ton free-on-board compared with production costs of $500 to $600 a ton, said Coleman, whose firm manages $1.3 billion of funds. A rebound in rubber prices based on fundamentals, including demand, may take as long as three years, he said. Thailand, the world’s largest rubber producer, has joined with Indonesia and Malaysia to try to support prices amid the global recession by delaying shipments and cutting down trees. The Vietnam Rubber Association said yesterday it may double stockpiles should prices extend declines. July-delivery rubber on the Shanghai Futures Exchange, the most-active contract, fell 1.2 percent to 13,805 yuan ($2,021) a ton at 10:15 a.m. local time.

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