January 14, 2009
Wednesday: China soy futures settle up; markets likely to consolidate
Soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday, tracking an overnight rise on the Chicago Board of Trade after Tuesday's tumble.
The benchmark September 2009 soybean contract settled RMB58 higher at RMB3,434/tonne, up 1.7%.
But the upside momentum of domestic soybeans has slowed amid the latest rebound, and the market may consolidate in the near term, said analysts.
Many traders were short-selling Wednesday, expecting a fall tomorrow.
Anyway, the U.S. Department of Agriculture's supply and demand report was negative to the market, and the rebound is near a conclusion, said Yu Haifeng, an analyst with Tianqi Futures.
He expects the benchmark contract to stay within the RMB3,300-RMB3,500/tonne range in the near term, with more likelihood of a downward correction.
Trading volume for all soybean contracts declined to 632,404 lots from 983,474 lots Tuesday.
Open interest rose 980 lots to 360,446 lots Wednesday.
Corn futures, soymeal futures and soyoil futures settled higher, but palm oil futures settled little changed.
Soymeal futures lost their earlier momentum to jump as cash supply increased while the peak demand period ahead of the Chinese New Year holiday, which falls on Jan. 25, has concluded, putting pressure on prices, said analysts.
But as many soybean processing plants will suspend production one after another toward the holiday, cash prices are unlikely to tumble as well, they said.
Wednesday's settlement prices in yuan a metric tonne for benchmark contracts and the volume for all contracts in lots (One lot is equivalent to 10 tonnes):
Contract Settlement Price Change Volume
Soybean Sep 2009 3,434 Up 58 632,404
Corn May 2009 1,553 Up 5 138,448
Soymeal May 2009 2,643 Up 8 871,118
Palm Oil May 2009 5,370 Dn 2 227,050
Soyoil May 2009 6,330 Up 38 438,644
