April 24, 2009
Friday: China soy futures settle down; government warns of high imports
Soy futures traded on China's Dalian Commodity Exchange settled lower Friday, following an alert issued by the government on excessive imports.
The benchmark Jan 2010 soy contract settled down RMB13, or 0.4%, at RMB3,437 a metric tonne.
The contract opened higher, but edged lower after the government put out a warning that imports of oilseeds have been too large in recent months given ample domestic supply.
The Ministry of Commerce said that Chinese companies should slow soy and rapeseed imports to avoid risks associated with large inventories.
"Importers should closely watch the market tendency...(in order) to avoid losses caused by excessive imports," the ministry's foreign trade department said in a statement published on its Web site.
The country imported 10.15 million tonnes of soys and 625,802 tonnes of rapeseed in the first quarter, up 30% and 99% on year, respectively.
Imports in April and May will remain high as well, according to the ministry's monitoring system.
The high oilseed imports were mostly due to a shift in demand to cheaper imported soys after local prices rose due to government purchases.
The statement led the market to expect possible policy moves to reduce big imports.
"U.S. soy prices will fall if Chinese imports fall, thus reducing import costs later," said an analyst with China National Cereals Trade Corp.
But analysts said the impact of policy moves could be short term as global supplies of vegetable oil remain tight.
Trading volume in all soy contracts declined to 168,548 lots from 203,708 lots Thursday.
Open interest fell 90 lots to 347,512 lots Friday.
Corn futures, soyoil futures and palm oil futures settled higher, while soymeal futures settled lower along with soys.
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
Soy Jan 2010 3,437 Dn 13 168,548
Corn Sep 2009 1,688 Up 8 102,724
Soymeal Sep 2009 2,770 Dn 35 1,092,300
Palm Oil Sep 2009 6,358 Up 68 622,744
Soyoil Sep 2009 6,970 Up 74 1,008,378
