April 9, 2009
Thursday: China soy futures up on concerns weather threatens supply
Soybean futures rose slightly on the Dalian Commodity Exchange Thursday on a stream of positive news about steadying demand and expectations of tighter supply.
With uncertainty in weather forecasts and a smaller-than-expected increase in U.S. plantings, traders and analysts believe crop sizes might shrink this year.
The benchmark September 2009 soybean contract gained 0.6% to settle at RMB3,608 a metric tonne.
"We're on a growth spell for agricultural futures prices, and there's not much bad news globally," said Gao Yanrong, an analyst with Dalu Futures.
Weather worries, usual for this time of year, fueled speculation Thursday that futures would see more upside, said analysts.
"The weather hasn't been very normal this year all over the world," Gao said.
"Every year, there are worries around this time that bad weather would affect crop size," said Li Honglei of Nanhua Futures.
Soybean goes to plantings this month, to be harvested in October, Gao said.
With the Chicago Board of Trades climbing, the only external drag on futures prices Thursday was on the tepid equities front, said Gao.
Soybean futures on the Chicago Board of Trade's electronic bourse made gains Wednesday, with nearby futures at two-month highs on bullish fundamentals.
"Soybean prices are underpinned by a slew of factors spanning drought and lower production from the southern hemisphere, strong imports into China, and more recently, the modest, below-market estimate rise in 2009 U.S. plantings," Barclays Capital said in a report late Wednesday.
Soymeal, corn, palm oil and soyoil futures posted gains across the board.
Overall demand for agricultural products across the board remains steady, Li said.
"Now it's all up to the weather," he added.
Thursday'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 3,608 Up 23 224,546
Corn Sep 2009 1,688 Up 1 39,578
Soymeal Sep 2009 2,912 Up 61 1,662,110
Palm Oil Sep 2009 5,824 Up 48 246,230
Soyoil Sep 2009 6,604 Up 38 638,356
