Thursday: China soy futures settle down; bearish sentiment, weak equities
Soy futures fell on the Dalian Commodity Exchange Thursday, dragged down by bearish sentiment across the commodity complex, which was in turn pressured by weaker equities and a lack of supportive fundamental news.
The benchmark September soy contract settled 0.8% lower at RMB3,861 a metric tonne.
"The decline is not due to fundamental reasons," said Beite Futures analyst Li Xiaoli. "Sentiment seems weaker today as the market seems very susceptible to a bearish mood."
Market buzz that China had punished seven banks for misusing loans for equity investments cast a pall over buying sentiment, reinforcing the government's policy of tightening expansionary credit conditions, analysts said.
The Shenzhen arm of the China Banking Regulatory Commission instructed the banks, including China Construction Bank, Bank of China and China Merchants Bank, to immediately recall RMB13.4 million of credit, China Business News reported Thursday, quoting unnamed sources.
The Shanghai composite index ended down 2.4% while the Shenzhen composite fell 3% Thursday. Analysts also attributed the decline to a technical correction and profit-taking.
Chicago Board of Trade soy futures backpedaled from early advances Wednesday in the absence of fresh fundamental supportive news, and continued to weaken during Asian trading hours, losing nearly 10 cents.
Trading volume on Dalian for all soy contracts fell to 318,296 lots from 403,680 lots Wednesday.
Open interest rose 2,006 lots to 371,996 lots.
Corn, soymeal, palm oil and soyoil futures also fell Thursday.
Thursday's settlement prices in yuan a tonne for benchmark contracts and volume for all contracts in lots (one lot is equivalent to 10 tonnes):
Product Contract Settlement Price Change Volume
Soy Sep 2010 3,861 Down 33 318,296
Corn Sep 2010 1,866 Down 6 49,380
Soymeal Sep 2010 2,798 Down 35 1,042,400
Palm Oil Sep 2010 6,922 Down 36 334,680
Soyoil Sep 2010 7,492 Down 32 437,648
