May 21, 2009
Thursday: China soy futures settle up; rise may continue for a while
Soy futures traded on the Dalian Commodity Exchange settled higher Thursday, following gains on the Chicago Board of Trade overnight.
The benchmark January 2010 soy contract settled RMB11 a metric tonne higher at RMB3,576/tonne, or up 0.3%.
The sudden rise in DCE soys Wednesday and the subsequent gains overnight on the CBOT lent continued support to the domestic market, although there was some profit-taking on the CBOT, said analysts.
The DCE September contract broke through psychological level of RMB3,700/tonne Wednesday, as open interest in the January contract jumped, triggering expectations of further gains, Tianqi Futures said in a note.
Meanwhile, the market expects the supply of cash soys in major producing areas will be lower than had been forecast earlier, due to government purchases, and that should help to support cash prices.
The DCE has announced temporary changes in trading margins and trading limits for contracts traded on the bourse around the coming Dragonboat holiday, which falls on May 28.
The minimum trading margins of soy, soymeal, soyoil, corn and palm oil futures contracts will be raised to 10% of contract value from current 5%-7% as of settlement time of Tuesday, and back to the current level at settlement on June 1.
The upper and lower trading limits of the above contracts will be raised over the same period to 7% from current 4%-5%.
If prices hit the trading limits on June 1, the changes in margins and trading limits could be extended.
On Thursday, the trading volume of all soy contracts declined to 728,692 lots from 861,864 lots Wednesday.
Open interest fell 21,140 lots to 368,790 lots.
Corn futures, soymeal futures, soyoil futures and palm oil futures all settled lower.
Thursday'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 3,576 Up 11 728,692
Corn Sep 2009 1,678 Dn 2 35,474
Soymeal Sep 2009 2,935 Dn 5 1,453,336
Palm Oil Sep 2009 6,716 Dn 44 338,592
Soyoil Sep 2009 7,470 Dn 50 1,152,412
