Core Insights - The European Union Deforestation Regulation (EUDR) will come into effect for large enterprises on December 31, 2023, requiring all products entering the EU market to be deforestation-free and legally produced according to the laws of the country of origin [1] Group 1: Impact on Sri Lanka's Exports - Seven commodities affected by the EUDR include beef, cocoa, coffee, palm oil, soybeans, timber, and natural rubber and its derivatives [1] - Sri Lanka's rubber exports to the EU could face a potential loss of approximately $24.4 million annually if the new regulations are adhered to, and a complete shutdown of rubber exports to the EU could lead to a GDP contraction of 0.07% [1] - In 2024, Sri Lanka is expected to export 27 different rubber and rubber products valued at $337.7 million to the EU, which remains the primary destination for Sri Lanka's value-added rubber exports [1] Group 2: Compliance Challenges - Although Sri Lanka is anticipated to be classified as a low-risk country under the EUDR, exporters will still need to provide detailed geographical location and proof of legal land ownership [1] - Large plantations are less likely to face significant challenges, but smallholders, who account for nearly 69% of the rubber cultivation area (totaling 98,393 hectares), may encounter substantial difficulties [1]

1. Report Industry Investment Rating No information provided in the report. 2. Core View of the Report - The rubber market is expected to be volatile. The fundamental trend of increasing supply and decreasing demand remains unchanged. As the seasonal rubber - tapping season arrives in domestic and foreign production areas, raw material prices are likely to fall, with insufficient cost - side support. Under the pressure of increased supply, there are no signs of improvement on the demand side, and the market lacks a strong upward driving force. After the previous sharp decline in rubber prices, the prices may fluctuate during the upward repair process due to macro - sentiment fluctuations [66]. 3. Summary by Relevant Catalogs 3.1 Industry News - **Cote d'Ivoire**: In the first five months of 2025, rubber exports totaled 629,672 tons, a 7.9% increase from the same period in 2024. In May, exports increased by 23.2% year - on - year but decreased by 9.6% month - on - month [5]. - **India**: Adequate monsoon rains in Kerala may boost natural rubber production by 5% - 10% this fiscal year. However, the decline in international block rubber prices may affect domestic prices [5]. - **Thailand**: The Rubber Authority of Thailand (RAOT) is accelerating the registration of 20 million rai of rubber plantations to comply with the EUDR regulations. Thailand has been classified as a low - risk country, which will enhance the competitiveness of its rubber exports to the EU [6][7]. 3.2 Price - This week, both domestic and foreign rubber markets rebounded slightly, with the domestic market having a larger increase. On June 6, 2025, the closing prices of RU2509, NR2509, Singapore TSR20:2509, and Tokyo RSS3:2509 were 13,650 yuan/ton, 11,790 yuan/ton, 159.90 cents/kg, and 304.10 yen/kg respectively, with weekly increases of 1.83%, 2.12%, 0.19%, and 1.37% [10][11]. 3.3 Basis and Spread - **Basis**: On June 6, 2025, the basis of whole - milk rubber - RU was 0 yuan/ton, with a 100% increase compared to the previous period and a 100% increase year - on - year [15]. - **Spread**: The 09 - 01 spread was - 890 yuan/ton, with a - 11.95% change compared to the previous period and a 26.14% increase year - on - year [15]. 3.4 Other Spreads - **Cross - variety/cross - market spreads**: On June 6, 2025, the spreads of RU09 - NR09, RU09 - BR09, NR09 - TSR20 09, and RU09 - Tokyo RSS3 09 were 1,860 yuan/ton, 2,575 yuan/ton, 301.98 yuan/ton, and - 1,447.06 yuan/ton respectively. The spreads of RU - BR, RU - JPX RSS3, and NR - SGX TSR20 increased [16][17]. - **Non - standard basis**: The import rubber market's offer center of gravity moved down this week. The spot price of domestic natural rubber followed the futures market and weakened. The downstream demand did not improve significantly [18]. - **Light - dark color spread**: The difference between whole - milk rubber and Thai mixed rubber increased, while the difference between 3L rubber and Thai mixed rubber decreased [20]. 3.5 Substitute Prices - On June 6, 2025, the prices of butadiene rubber and styrene - butadiene rubber in the Chinese mainstream market were 11,600 yuan/ton and 11,850 yuan/ton respectively. The difference between synthetic rubber and RU decreased as synthetic rubber fluctuated slightly and RU increased more [30]. 3.6 Fund Trends - On June 6, 2025, the virtual - to - physical ratio of the RU main contract was 8.89, at a low level, and the settled funds were at a low level year - on - year. The virtual - to - physical ratio of the NR main contract was 17.69, showing a decline from a high level, and the settled funds also declined from a high level [31][32]. 3.7 Fundamental Data 3.7.1 Supply - **Weather**: In Thailand, the temperature in the northeast was slightly lower this week, and rainfall was higher compared to the same period. Yunnan and Hainan in China are gradually entering the rainy season [35][36]. - **Raw material prices**: On June 6, 2025, the prices of cup lumps, latex, smoked sheets, and raw sheets in Thailand were 44.90 baht/kg, 56.00 baht/kg, 65.90 baht/kg, and 62.26 baht/kg respectively. The prices of Hainan and Yunnan latex were 12,400 yuan/ton and 12,900 yuan/ton respectively. Due to more rain disturbances in production areas and the decline of the spot - futures market, raw material prices continued to fall [37]. - **Raw material spreads**: The Thailand cup - latex spread fluctuated greatly, and the spread between Hainan latex entering the concentrated latex factory and the whole - milk rubber factory increased [41]. - **Upstream processing profits**: On June 6, 2025, the production profits of Thai standard rubber, concentrated latex, smoked sheets, and Hainan concentrated latex were 177 yuan/ton, 1,820 yuan/ton, - 181.72 yuan/ton, and 684.42 yuan/ton respectively. Processing profits increased significantly due to the sharp decline in raw materials [44][46]. - **Rubber imports**: In April 2025, China's natural rubber imports (including mixed and composite rubber) decreased by 12% month - on - month and increased by 42% year - on - year. The imports of Thai standard rubber and Cote d'Ivoire standard rubber were at a high level [47][48]. 3.7.2 Demand - **Tire capacity utilization and inventory**: On June 6, 2025, the capacity utilization rates of all - steel and semi - steel tires were 55.65% and 64.05% respectively, showing a decline. The inventory days of all - steel and semi - steel tires were 41.87 days and 45.84 days respectively. The tire inventory decreased marginally [49][50]. - **Tire exports and heavy - truck sales**: In April 2025, the exports of all - steel and semi - steel tires decreased seasonally month - on - month but performed well year - on - year. Heavy - truck sales decreased month - on - month and increased slightly year - on - year. Passenger car sales decreased month - on - month and were at a high level year - on - year [52][53]. 3.7.3 Inventory - **Spot inventory**: On May 30, 2025, the inventories of dark - colored rubber, light - colored rubber, and the total social inventory of natural rubber in China were 76.35 tons, 51.70 tons, and 128.05 tons respectively, showing a downward trend [54][56]. - **Futures inventory**: On June 6, 2025, the futures inventories of natural rubber in the SHFE and INE were 19.35 tons and 2.19 tons respectively, with a decrease of 2.61% and an increase of 23.99% compared to the previous week [57]. 3.8 Operation Suggestions - The rubber market is expected to be volatile. The fundamental situation of increasing supply and weakening demand remains unchanged. The cost - side support is insufficient, and the demand shows no signs of improvement. After the previous sharp decline, the rubber price may fluctuate during the upward repair process [66].

1. Industry Investment Rating - There is no information about the industry investment rating in the report. 2. Core Viewpoints - The report provides a comprehensive overview of the overnight and spot market conditions for various commodities, including palm oil, soybeans, and crude oil, as well as important fundamental information, macro news, and key information analysis. It highlights the impact of factors such as weather, policy, and supply - demand on commodity prices and market trends [1][2][3][21] 3. Summary by Directory Overnight Market Conditions - The closing prices and percentage changes of various futures contracts, including BMD palm oil, ICE Brent crude oil, NYMEX WTI crude oil, CBOT soybeans, soybean meal, and soybean oil, are presented. The exchange rate changes of multiple currencies are also provided [1] Spot Market Conditions - The spot prices, basis, and basis changes of DCE palm oil, soybean oil, and soybean meal in different regions are given. The CNF premiums and quotes for soybean crushing in various regions are also provided [2] Important Fundamental Information - **Weather**: The US soybean - producing states are expected to have higher - than - average temperatures and more rainfall from June 2 - 6. Midwest rainfall is beneficial for sown areas, with temperature recovery expected later in the week [3][5] - **Policy and Trade**: Malaysia is concerned about the EU's classification as a "standard risk" country. Indonesia has lowered the reference price of crude palm oil in June. Anec predicts Brazil's soybean, soybean meal, and corn exports from May 25 - 31 [6][7][8] - **Production and Sales**: Argentina's 2024/25 soybean production is expected to decline slightly. Indian government plans to purchase major summer - sown crops at state - set prices. Canada's 2025/26 rapeseed production is expected to decrease, while Australia's is expected to be 620 tons. Egypt will double the storage capacity of an important edible oil terminal [9][10][11] - **Shipping**: The Baltic Dry Index rose due to the increase in the Capesize Index, while the Panamax and Supramax Indexes declined [12] Domestic Supply - Demand Situation - On May 28, the trading volume of edible oils decreased significantly. The trading volume and开机 rate of soybean meal also changed. China allows the import of Brazilian corn distillers' grains and peanut meal [14] Macro News - **US**: The probability of the Fed maintaining interest rates in June is 97.8%. Multiple economic data, such as the Dallas Fed Services Revenue Index and the Richmond Fed Manufacturing Index, are released. The Fed's meeting minutes show a downgrade in GDP growth forecasts [17] - **OPEC+**: OPEC+ may discuss 2027 production benchmarks and accelerate oil production in July [18] - **Eurozone**: The 1 - year CPI expectation is 3.1%, higher than the estimate [18] - **China**: The US dollar/Chinese yuan exchange rate increased on May 28. The central bank conducted 7 - day reverse repurchase operations, resulting in a net injection of 585 million yuan [20] Key Information Analysis - The MPOB's April palm oil supply - demand report shows an increase in ending inventory, with a significant increase in production and a relatively small increase in exports, which is bearish for the market. The USDA's May soybean supply - demand report is bullish for the market, as it lowers the expected ending inventory of US soybeans in 24/25 and 25/26 [21] Capital Flows - On May 28, 2025, the futures market had a net capital outflow of 9.627 billion yuan, including 707 million yuan from the commodity futures market and 8.921 billion yuan from the stock index futures market [26]