Thursday: China soy futures settle up; CBOT, strong economic data support

 

 

Soy futures traded on the Dalian Commodity Exchange settled higher Thursday, following a rebound on the Chicago Board of Trade overnight.

 

The benchmark September 2010 soy contract settled up RMB28, or 0.7%, at RMB3,807 a metric tonne.

 

Gains in external markets, including metals and equities, as well as strong economic data helped sentiment toward agricultural products, pushing local soy higher despite heavy reductions in positions by funds ahead of the week-long Lunar New Year holiday.

 

The broader gains were related to the euro's recovery against the dollar, while the supporting issue for the local market was the potential for inflationary pressures to build.

 

"Given the continued strength in real economic growth and the renewed expansion in credit supply, we believe it is important to stay highly vigilant on inflation," Goldman Sachs said in a research note.

 

Financial institutions in China extended RMB1.39 trillion worth of new yuan loans in January, up sharply from RMB379.8 billion in December, according to official data released Thursday.

 

The consumer price index rose 1.5% in January from a year earlier, slowing from 1.9% in December and coming in below market expectations of a 2.0% rise. However, the moderation in inflation was due mainly to slower food-price gains, while non-food price inflation accelerated to 0.5% last month, picking up from 0.2% in December and a 0.7% decline in November.

 

Trading volume of all soy contracts declined to 254,948 lots from 325,122 lots Wednesday.

 

Open interest fell 24,332 lots to 341,736 lots Thursday.

 

Corn futures, soyoil futures, palm oil futures and soymeal futures all settled higher.

 

Following are Thursday'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      3,807        Up   28    254,948

Corn       Sep 2010      1,857        Up    5     31,562

Soymeal  Sep 2010      2,781        Up   38    702,932

Palm Oil   Sep 2010      6,832        Up   50    234,892

Soyoil     Sep 2010      7,440        Up   64    334,222