March 5, 2009
Thursday: China soy futures settle up as stimulus hopes linger
China's soybean futures traded on the Dalian Commodity Exchange settled higher Thursday despite a brief disappointment in the market over the absence of additional stimulus measures expected from the National People's Congress.
The benchmark September 2009 soybean contract gained 0.9% to settle at RMB3,443 a metric tonne.
However, soybean prices may remain in consolidation mode in the coming sessions due to a lack of direction in fundamentals, and "market participants are now watching marcoeconomic news for further cues," said Great Wall Futures analyst Liu Xinghua.
Liu tipped nearby support at RMB3,300/tonne and nearby resistance at RMB3,500/tonne on chart-based cues.
Looking ahead, soybean will continue to get support from the 9-day annual parliamentary meeting as investors hold on to hopes the government would release additional stimulus measures to boost the economy.
Nevertheless, analysts are concerned the crop could be weighed down by a rise in imports coupled with thin domestic demand.
"We expect to see imports surging in the coming months, and that would leave the domestic market in surplus," despite the government's 40 million-tonne soybean purchase that is expected to be completed by April, said Liu.
The trading volume of all soybean contracts declined to 260,528 lots from 312,306 lots Wednesday.
The open interest fell 3,338 lots to 332,200 lots Thursday.
All other agricultural products settled higher, in line with soybean's gains on the exchange.
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
Soybean Sep 2009 3,443 Up 31 251,362
Corn Sep 2009 1,689 Up 6 78,924
Soy Meal Sep 2009 2,485 Up 16 773,142
Palm Oil May 2009 5,148 Up 70 20,260
Soy Oil Sep 2009 5,994 Up 50 317,306
