Monday: China soy futures up, confidence returns on government support

 

 

Soy futures rose on the Dalian Commodity Exchange Monday due to a technical rebound as well as restored confidence that government policies would continue to support agricultural prices.

 

The benchmark September soy contract settled RMB35 or 1% higher at RMB3,907 a metric tonne.

 

"After soy reached a support level last week, they're staging a technical comeback and taking their cue from market expectations that the central government is going to continue supportive policies for agriculture," said Li Xiaoli, analyst with Beite Futures.

 

Soy futures fell 1.2% through three consecutive days to RMB3,872/tonne Friday, as worries over tightening monetary policy spooked the commodity complex.

 

Beijing is likely to reconfirm its soy stockpiling and other supportive policies to stabilize prices in its "first central government document," which Li said is expected to be issued toward the end of the month.

 

"Everyone knows the document's going to be good for agriculture," said Gao Yanrong, research manager for Dalu Futures.

 

Dalian soy also took additional cues from counterpart futures on the Chicago Board of Trade gaining more than 3 U.S. cents during Asian trading hours.

 

Trading volume on Dalian for all soy contracts rose to 343,742 lots from 302,436 lots Friday.

 

Open interest rose 7,152 lots to 343,444 lots.

 

Soyoil, soymeal and palm oil futures rose, but corn futures settled 0.4% lower.

 

Monday'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      3,907        Up   35     343,742

Corn       Sep 2010      1,871        Dn    8      95,968

Soymeal  Sep 2010      2,874        Up   11     496,300

Palm Oil   Sep 2010      6,830        Up   78     805,706

Soyoil      Sep 2010      7,436        Up   48     898,768