Friday: China soy futures settle down with metals; rate hike worries
China's soy futures traded on the Dalian Commodity Exchange settled lower Friday, along with the fall on outside markets on rate hike concerns.
The benchmark September 2010 soy contract settled down RMB41, or 1.1%, at RMB3,815 a metric tonne.
The contract opened lower and remained in negative territory for the whole session.
The fall on Chicago Board of Trade overnight as well as uncertainties in local tightening policies both pressured the market.
People's Bank of China Vice Governor Su Ning indicated China must diligently watch inflation risk as he estimated the on-year rise in consumer prices this year will be faster in the first half than the second simply due to a low base effect.
Stronger-than-expected February CPI data as well as other strong Chinese economic data issued earlier this week have prompted the market to expect an imminent rate hike.
Various rumors ran through China markets about the potential for some sort of near-term tightening--such as interest rates could be hiked 27 basis points as soon as Monday and the reserve requirement ratio may be lifted--several traders said Friday.
The soy market is now in a mood to sell, as supply pressure and rate hike concerns need to be further digested, Galaxy Futures said in a note.
Trading volume of all soy contracts declined to 314,146 lots from 498,142 lots Thursday.
Open interest fell 1,000 lots to 370,348 lots Friday.
Corn futures settled higher, while soyoil, palm oil and soymeal futures settled lower.
Following are Friday'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 3,815 Down 41 314,146
Corn Sep 2010 1,876 Up 4 48,834
Soymeal Sep 2010 2,749 Down 39 809,578
Palm Oil Sep 2010 6,920 Down 56 338,380
Soyoil Sep 2010 7,500 Down 64 437,844
