April 17, 2009
Friday: China soy futures settle up; strong CBOT gains supportive
China's soybean futures traded on the Dalian Commodity Exchange settled higher Friday, supported by the strong gain on the Chicago Board of Trade overnight.
The benchmark January 2010 soybean contract settled 0.2% higher at RMB3,546 a metric tonne.
CBOT soybean futures reached a seven-week high last night, with May soybeans ending 23 1/2 cents higher at US$10.58 1/2 per bushel, supported by strong Chinese demand.
Soybeans opened higher Friday in Dalian, but pared gains during the session as they faced pressure approaching RMB3,600/tonne.
Domestic soybean futures have rebounded considerably and CBOT soybeans face heavy technical pressure, said Yu Haifeng, an analyst with Tianqi Futures.
Cash soybean prices in the major northeastern producing areas have fallen this week as farmers' willingness to sell their harvests increased ahead of spring planting.
Some market participants said the government likely won't be able to complete its planned purchase of 6 million tonnes of soybeans in the northeast producing areas by end-April as the moisture content of farmers' soybeans is too high to meet the government's standard.
China may extend its state purchases by two months to end-June, but the market impact will probably be limited, analysts said.
Farmers don't know how to lower the harvest's moisture content, so they won't be able to boost the quality to the government's standard, said Liu Peng, a manager at Longma Consultation in Heilongjiang province.
Trading volume of all soybean contracts declined to 195,126 lots from 228,802 lots Thursday.
Open interest rose by 934 lots to 315,354 lots Friday.
Corn futures settled steady, soymeal settled higher and soyoil and palm oil futures settled lower.
Friday'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 3,546 Up 7 195,126
Corn Sep 2009 1,685 Up 1 40,856
Soymeal Sep 2009 2,956 Up 38 1,111,512
Palm Oil Sep 2009 6,396 Dn 72 488,134
Soyoil Sep 2009 7,120 Dn 28 1,020,354
