May 7, 2009
Thursday: China soy futures settle tad up; concerns of correction
Soy futures traded on the Dalian Commodity Exchange settled slightly higher Thursday, supported by an overnight rally on the Chicago Board of Trade.
The benchmark January 2010 soy contract settled RMB8 a metric tonne higher at RMB3,501/tonne.
The contract opened higher in line with CBOT's rally Wednesday but lost upward momentum and gave back much of its gains during the session as traders became cautious after CBOT's recent big jump.
"CBOT (soy) prices see much pressure as they are approaching US$12 (per bushel), and the possibility of a correction is not excluded," said Sui Zhi, an analyst with Longma Consultation in Heilongjiang province.
May soy futures on the Chicago Board of Trade ended 19 cents higher Wednesday at US$11.35.
But favorable government policies for domestic soys have been supporting local market prices.
Meanwhile, farmers in the northeast producing areas are expected to grow more corn instead of soys this year due to the attraction of higher profits.
Analysts said as a result, domestic soy prices are unlikely to head lower ahead of the 2009 harvest in September.
Trading volume for all soy contracts rose to 221,592 lots from 207,826 lots Wednesday.
Open interest rose 5,392 lots to 318,290 lots.
Corn futures settled little changed, soymeal futures settled unchanged, while soyoil futures and palm oil futures settled higher.
Open interest for the benchmark September soyoil contract fell 17,228 lots to 296,844 lots at the closing bell.
Some traders may have taken profit as the contract failed to remain stable above RMB7,700 after the recent surge in prices, said Li Lei, an analyst with China National Cereals Trade Corp.
Thursday's settlement prices in yuan a metric tonne for benchmark contracts and the volume for all contracts in lots (One lot is equivalent to 10 tonnes):
Contract Settlement Price Change Volume
Soy Jan 2010 3,501 Up 8 221,592
Corn Sep 2009 1,663 Up 1 50,658
Soymeal Sep 2009 2,861 Unch 1,185,722
Palm Oil Sep 2009 6,884 Up 174 650,928
Soyoil Sep 2009 7,632 Up 140 1,407,172
