Wednesday: China soy futures fall, record harvest estimates weigh

 

 

Soy futures fell on the Dalian Commodity Exchange Wednesday, weighed down by global supply concerns from forecasts of a record crop looming in South America.

 

The benchmark September 2010 soy contract settled down RMB28 or 0.7% at RMB3,779 a metric tonne.

 

The bearish sentiment dragged prices down despite the U.S. Department of Agriculture Tuesday cutting its U.S. estimates for soy and corn, which would have been friendly for crop prices.

 

"The effect of that downward adjustment was outweighed by the expectations of the South American crop," said Tu Xuan, analyst with Shanghai JC Intelligence Co.

 

Chicago Board of Trade soy futures ended lower Tuesday on hedge-related selling and bearish supply outlooks.

 

The Brazilian crop regulation agency Conab on Tuesday made another upward revision to its 2009-2010 soy output forecast, raising it to 66.7 million tonnes.

 

"A record-large crop...appears likely," Lewis Hagedorn of J.P. Morgan said in a note. "Conab also raised estimated acreage by approximately 146,000 hectares."

 

Trading volume on Dalian for all soy contracts rose to 325,122 lots from 147,514 lots Tuesday.

 

Open interest rose 7,354 lots to 366,068 lots.

 

Corn and palm oil futures rose. Soymeal fell, while soyoil was unchanged.

 

Wednesday'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      3,779        Dn   28     325,122

Corn       Sep 2010      1,852        Up    5      58,512

Soymeal  Sep 2010      2,743        Dn    9     749,520

Palm Oil  Sep 2010      6,782        Up   12     441,494

Soyoil     Sep 2010      7,376           Unch     405,618