Monday: China soy futures settle up on rise in CBOT, cash prices

 

 

The benchmark January 2010 soy contract settled RMB151 a metric tonne higher at RMB3,528/tonne, or up 4.5%.

 

The DCE was closed Friday for the Labour Day holiday, when CBOT soys recorded massive gains.

 

Tightening old crop stocks, strong U.S. soy export data and declining estimates for Argentina's soy crop all helped to push prices higher, said analysts.

 

"The concerns over the swine flu outbreak have already been factored in, and the market focus is now shifting to fundamentals, which are strong," said a local analyst.

 

The market also widely expects the U.S. Department of Agriculture to cut its estimate of soy ending stocks in its May report.

 

The Chinese government's recently announced plan to purchase another 1.25 million tonnes of soys from major producing areas by the end of June also helped market sentiment and pushed cash prices higher over the weekend.

 

The government had already planned to purchase 6 million tonnes of local soys since last year's harvest, and it had extended the purchase period for that amount by two months to the end of June.

 

"The (additional) purchases will further tighten domestic supply and push domestic soy prices towards the purchase price of RMB3,700/tonne," Tianqi Futures said in a note.

 

Trading volume of all soy contracts rose to 370,548 lots from 174,392 lots Thursday.

 

Open interest rose 5,178 lots to 302,956 lots Monday.

 

Monday'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):

Soy          Jan 2010          3,528       Up  151       370,548

Corn        Sep 2009         1,670        Up    2        97,098

Soymeal   Sep 2009        2,837        Up  121       1,038,918

Palm Oil    Sep 2009        6,580        Up  310       12,430