April 15, 2009
Wednesday: China soy futures inch up as demand appears resilient
Soybean futures gained slightly on the Dalian Commodity Exchange Wednesday, holding on to confidence over Chinese demand even as the Chicago Board of Trade's electronic bourse posted small losses in morning trade.
The benchmark January 2010 soybean contract climbed 0.5% to settle at RMB3,514 a metric tonne.
A recent surge in soybean imports is broadly lending confidence to the market Chinese demand would remain resilient.
Some lingering concerns on oversupply trimmed larger gains in the early session, with traders worried the imports and a 6-million-tonne government stockpile could drag down prices within a couple of months.
"We're concerned that there may be some supply pressure after April," said Monica Tu, an analyst with Shanghai JCI.
Still, Wednesday's trade settled in positive territory. Even in the event of supply pressure, price declines are not expected to be large, Tu said.
"Tactical investors held a positive view across the agricultural markets," Barclays Capital said in a note Wednesday. "Continued strength in Chinese soybean imports has been a key factor underpinning the rally in soybean prices."
Soybean futures on the CBOT settled higher Tuesday, rising to 2 1/2-month highs on strong fundamentals, buoyed by relatively tight supply and the strong Chinese import demand.
China's trade data for March showed soybean imports rose 66% on year to 3.86 million tonnes.
Offsetting supply woes, demand is also expected to rise after May, as new piglets are born and the need for soybean meal increases, Tu said.
Soy meal, palm oil and soybean oil futures posted gains Wednesday.
Corn futures settled lower, as concerns hovered over the 30-million-tonne government stockpile that looms over market supply.
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 Jan 2010 3,514 Up 17 234,562
Corn Sep 2009 1,684 Dn 5 56,480
Soy Meal Sep 2009 2,873 Up 11 988,240
Palm Oil Sep 2009 6,402 Up 202 401,332
Soy Oil Sep 2009 7,010 Up 158 890,022
