May 25, 2009

Soy futures traded on the Dalian Commodity Exchange settled higher Monday, as the drought in China's northeast producing areas gave traders an excuse to set up new positions.

 

The benchmark January 2010 soy contract settled RMB23 a metric tonne higher at RMB3,649/tonne, or up 0.6%.

 

There has been a drought in major soy-producing province of Heilongjiang since early May, and windy weather has threatened the growth of the soy seedling, the province's agricultural information center said in a note.

 

The area suffering from the drought is also expanding at a rate of 200,000 hectares per day, it said.

 

Yu Haifeng, an analyst with Tianqi Futures based in the province, said that if there is no rain this week, the growth of the crop will be affected.

 

However, funds were reluctant to set up new positions aggressively before the coming Dragon Boat holiday, during which the Chicago Board of Trade will be open.

 

Chinese financial markets will be shut Thursday and Friday in observation of the holiday.

 

Trading volume of all soy contracts declined to 758,858 lots from 766,232 lots Friday.

 

Open interest rose 37,028 lots to 426,114 lots Monday.

 

Corn futures settled little changed, while palm oil futures, soymeal futures and soyoil futures settled slightly lower.

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):

                             
Contract         Settlement        Price         Change       Volume

Soy                Jan 2010          3,649         Up   23       758,858

Corn              Sep 2009          1,670         Dn    1         56,374

Soymeal        Sep 2009           2,950        Dn   13       931,150

Palm Oil         Sep 2009           6,672        Dn   28       304,860

Soyoil            Sep 2009           7,494        Dn    6     1,000,944