April 29, 2009
Wednesday: China soy futures up on short-covering; flu panic subsides
China's soy futures traded on the Dalian Commodity Exchange settled higher Wednesday on short-covering, as swine flu concerns eased.
The benchmark January 2010 soy contract settled RMB22 higher at RMB3,307 a metric tonne, up 0.7%.
Analysts said the buying was marked by short-covering, as the market was turning rational after initial panic over the swine flu outbreak.
Anyway, the overall supply of soys has been tight thanks to high domestic demand: so far the outbreak has been limited to humans - it hasn't spread to hogs yet, said Ju Wei, a futures analyst with Heilongjiang Jiusan Oil and Fat Co.
Meantime, analysts said the government's policies will continue to support agricultural products, preventing a big selloff in the market.
"It's the planting season for soy, and policy concerns" are likely to stop speculators from massive selling, said Gao Yunyue, an analyst with Zhejiang Dadi Futures Brokerage.
The market is abuzz with talk of Chinese importers having canceled several U.S. soy cargoes; analysts said if true, it could be probably be due to worries over swine flu, which may reduce demand for pork and thus the demand for feedmeal.
However, Gao said, the cancellation is unlikely to become a trend as people stop panicking over the outbreak.
The trading volume of all soy contracts declined to 161,554 lots from 248,144 lots Tuesday.
The open interest fell 16,356 lots to 307,144 lots Wednesday.
Corn, soy meal and soy oil futures settled slightly higher, but palm oil futures settled a tad lower.
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
Soy Jan 2010 3,307 Up 22 161,554
Corn Sep 2009 1,667 Up 3 104,814
Soy Meal Sep 2009 2,647 Up 29 1,226,390
Palm Oil Sep 2009 6,038 Dn 8 381,316
Soy Oil Sep 2009 6,736 Up 44 616,266
