May 6, 2009
Wednesday: China soy futures settle up; soyoil's fast gains support
China's soy futures traded on the Dalian Commodity Exchange settled higher Wednesday, supported by higher soyoil prices.
The benchmark January 2010 soy contract settled RMB11 a metric tonne, or 0.3%, higher at RMB3,493/tonne.
The contract opened lower, tracking CBOT's fall overnight. But a sudden rise in soyoil prices helped push soys higher in the afternoon session.
The benchmark September soyoil contract hovered around Tuesday's settlement price in the morning session, but rose by as much as 3.1% during the afternoon session.
Open interest in the benchmark soyoil contract surged by 72,468 lots to 314,072 lots at the closing bell.
"The market expect higher soyoil prices due to the recent strong performance of crude oil and weak soymeal cash prices," said Jia Xiaoju, an analyst with Zhonghui Futures.
When soymeal prices are weak enough to threaten crushers' bottom lines, they tend to reduce overall production, which reduces soyoil output and can support prices.
Soy cash prices were higher on expectations of tightening supply after the government said it would buy another 1.25 million tonnes of the crop from major producing areas by end-June.
Planting season is also an opportunity for traders to push soy prices higher as bad weather could strike at any time, analysts said.
Trading volume of all soy contracts declined to 207,826 lots from 228,870 lots Tuesday.
Open interest fell by 3,558 lots to 312,898 lots Wednesday.
Corn futures settled unchanged, while soyoil and palm oil futures settled higher.
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 3,493 Up 11 207,826
Corn Sep 2009 1,662 Unch 83,230
Soymeal Sep 2009 2,861 Up 49 1,080,456
Palm Oil Sep 2009 6,710 Up 48 597,408
Soyoil Sep 2009 7,492 Up 108 1,189,662
