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TOKYO, May 8 (Reuters) - Tokyo rubber futures fell by around 1 percent on Thursday as investors locked in profits after prices rose to a two-month high the previous day, although strong crude oil prices provided some support.
* The key Tokyo Commodity Exchange rubber contract for October delivery <0#JRU:> ended the first session down 1.1 yen at 307.0 yen a kg, after earlier hitting a morning low of 304.5 yen, down 3.6 yen or 1.2 percent.
* It rose to an intra-day peak of 308.9 yen on Wednesday, the highest level since March 6.
* Many traders see TOCOM rubber’s dip as part of moves to consolidate at the 300-yen level, in preparation for a further rise.
* “I think it will continue to trade above 300 yen, and that the current market is trying to consolidate at that level,” a Tokyo trader said.
* They expect the benchmark contract to eventually challenge this year’s peak of 324.3 yen, marked on Feb. 26.
* U.S. crude oil futures remained robust, hovering near a record high on fears about tight global supplies of diesel fuel.
* Front-month U.S. crude for June delivery CLc1 was trading at $123.51 a barrel on the Globex electronic trading platform, little changed from the previous day's record high settlement of $123.53, and in sight of the new intraday peak of $123.93.
* Rubber prices often benefit from high crude oil prices because investors believe expensive oil will encourage a shift to natural rubber from synthetic rubber, a petroleum product.
* In the currency market, the dollar was at 104.35 yen JPY= versus late U.S. trading levels of 104.75 yen.
* Physical rubber prices were strong as rain in some of the producing region has disrupted tapping, causing supplies to tighten.
* A report by the U.N. Food and Agriculture Organisation said a cyclone, which has killed about 23,000 people in Myanmar by some estimates, has damaged rice and other annual crops such as rubber. [ID:nBKK237635]
* A rubber trader in Thailand said that any damage to rubber trees in Myanmar was in itself unlikely to have a major impact on supplies as Myanmar was not a major producer of the commodity. (Reporting by Miho Yoshikawa)
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