May 26, 2009
Tuesday: China soy futures settle tad up; upward momentum wanes
China's soy futures traded on the Dalian Commodity Exchange settled slightly higher Tuesday even as its upward momentum waned as traders stayed on the sidelines ahead of the Dragon Boat holiday.
The benchmark January 2010 soy contract settled RMB4 a metric tonne higher at RMB3,653/tonne, or 0.1%.
The contract pared gains, after opening higher, as traders closed their positions.
Traders were reluctant to open new positions ahead of the holiday because directions may change during the time with most other markets, including the Chicago Board of Trade, open. Chinese markets will be shut Thursday and Friday.
Brokerages selling futures contracts raised their trading margins ahead of the holiday, adding more downward pressure to the market with less funds being available, said Jia Xiaoju, an analyst with Zhonghui Futures.
Analysts expect the country's commodities market to consolidate in the near term as concerns over a recovery in the economy still remain.
"There must be consolidation as the market has been rising when the real economy hasn't touched bottom yet," said Xiao Jun, an analyst with Shanghai JCI, a commodities consultancy firm.
Trading volume of all soy contracts declined to 531,104 lots from 758,858 lots Monday.
Open interest declined 54,716 lots to 371,398 lots Tuesday.
Corn, palm oil and soyoil futures settled lower, while soymeal futures settled higher.
Tuesday'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 3,653 Up 4 531,104
Corn Sep 2009 1,666 Dn 4 88,216
Soymeal Sep 2009 2,956 Up 6 1,019,572
Palm Oil Sep 2009 6,600 Dn 72 386,706
Soyoil Sep 2009 7,462 Dn 32 854,590
