Tuesday: China soy futures settle little changed; traders cautious
Soy futures on the Dalian Commodity Exchange settled little changed Tuesday, with other markets helping to support soy and soy products.
The benchmark September 2010 soy contract settled RMB1 or 0.02% higher at RMB4,070 a metric tonne.
The contract opened slightly lower and consolidated on both sides of Monday's settlement price within a tight RMB22 range.
Overnight, soy futures on the Chicago Board of Trade retreated later in the session after rising earlier, keeping Chinese traders cautious on the sidelines, although weakness in the dollar and strong crude oil prices supported commodities markets.
"The (retreat) showed there's a lack of upward momentum from fundamentals, and the good weather in South America will continue to cap the room for prices to rise," said Galaxy Futures in a note.
But strong consumption ahead of Chinese New Year in mid-February as well as a rise in energy and metals prices will help support the strong performance in soy and soy products, said some analysts.
Meanwhile, funds are likely to flow into agricultural products to boost prices as metals prices have been rising too fast recently, leaving agricultural products undervalued, said Gu Jianjun, an analyst with Jinyuan Futures.
Trading volume for all soy contracts declined to 257,818 lots from 328,320 lots Monday.
Open interest fell 1,156 lots to 344,944 lots.
Corn futures, soymeal futures, palm oil futures and soyoil futures all settled higher.
Tuesday's settlement prices in yuan a metric tonne for benchmark contracts and volume for all contracts in lots (One lot is equivalent to 10 tonnes):
Contract Settlement Price Change Volume
Soy Sep 2010 4,070 Up 1 257,818
Corn Sep 2010 1,895 Up 5 113,962
Soymeal Sep 2010 3,040 Up 2 1,193,908
Palm Oil Sep 2010 7,348 Up 38 732,046
Soyoil Sep 2010 8,062 Up 16 806,220
