Tuesday: China soy futures rise, track CBOT; supply pressures loom

 

 

Soy futures inched up on the Dalian Commodity Exchange Tuesday, in line with gains at the Chicago Board of Trade, but analysts warned of supply pressures on prices ahead.

 

The benchmark September soy contract settled 0.3% higher at RMB3,921 a metric tonne.

 

"Soy have been closely tracking CBOT, so the slight increase today speaks of a stabilizing market," said Tu Xuan, analyst with Shanghai JC Intelligence Co. "But the fundamental outlook for soy is still tending toward bearishness, mostly because of supply issues."

 

Chicago soy futures were up about 5 U.S. cents at around 0700 GMT Tuesday.

 

China's soy imports reached a record 4.78 million metric tonnes in December, and hefty volumes are expected to continue in the coming months as feed and soyoil demand grows to keep ahead of Chinese New Year consumption.

 

Based on Shanghai JC Intelligence's estimate, January and February soy imports will likely total 8 million-8.5 million tonnes, Tu said.

 

The high import volumes are expected to keep the pressure on spot prices in China.

 

Trading volume on Dalian for all soy contracts fell to 171,652 lots from 255,578 lots Monday.

 

Open interest rose 5,222 lots to 338,602 lots.

 

Corn, soyoil, palm oil and soymeal futures also rose Tuesday.

 

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      3,921        Up   13     171,652

Corn      Sep 2010      1,898        Up    4      60,660

Soymeal Sep 2010      2,913        Up   13     517,318

Palm Oil  Sep 2010      6,848        Up   40     438,340

Soyoil     Sep 2010      7,486        Up   60     653,904