February 25, 2009
Wednesday: China soy futures settle up; stable cash prices support
Soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday, supported by stable cash prices.
The benchmark September 2009 soybean contract settled RMB47 higher at RMB3,508 a metric tonne, after trading between RMB3,475-RMB3,540/tonne.
The government's ongoing purchase of grain has been supporting domestic prices, despite a bumper harvest last year.
Farmers in Heilongjiang province, a big soybean and corn producing area, have sold 23.4 million tonnes of soybeans, corn and rice since the harvest began late last year, or 77% of the expected sales volume, said grain information provider Northeast Network in a note.
The volume is up 3.5 million tonnes from the same period last year, it said.
Soybean cash prices in most of the province were between RMB3,400-RMB3,500/tonne, up sharply from before the Chinese New Year holiday.
The government's planned purchase of a total 6 million tonnes of soybeans in northeast producing areas doubles the expected volume of soybeans to be sold to other consumption areas in China, said Shen Enxian, an analyst at China International Futures Co.
He expects the benchmark soybean futures contract to consolidate between RMB3,300-RMB3,600/tonne in the near term, amid a lack of trading guidance.
Trading volume for all soybean contracts declined to 345,374 lots from 508,902 lots Tuesday.
Open interest fell 12,098 lots to 319,638 lots.
Corn futures settled lower, but soymeal futures, soyoil futures and palm oil futures all settled higher.
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 3,508 Up 47 345,374
Corn Sep 2009 1,681 Dn 8 171,116
Soymeal Sep 2009 2,550 Up 25 671,850
Palm Oil May 2009 5,190 Up 82 81,322
Soyoil Sep 2009 6,058 Up 166 444,728
