May 27, 2009

China's soy futures traded on the Dalian Commodity Exchange settled higher Wednesday, tracking a rise on the Chicago Board of Trade overnight and supported by an ongoing drought in local producing areas.

 

The benchmark January 2010 soy contract settled RMB18 higher at RMB3,671 a metric tonne, or up 0.5%.

 

The contract opened higher, but suffered from some selling pressure after failing to break through RMB3,700/tonne. It consolidated in a RMB3,650-RMB3,700 range in the positive territory during the session.

 

Drought in the major soy producing Heilongjiang province will affect the crop's growth, while falling acreage this year is adding to concerns over reduced output, said an official with China National Grain and Oils Information Center's local branch.

 

Rainfall is unlikely to occur in the coming days, he added.

 

However, Li Lei, an analyst with China National Cereals Trade Corp., said so far the drought hasn't had a substantial impact on the crop, adding any concern was just an excuse to push up prices.

 

The trading volume of all soy contracts rose to 583,192 lots from 531,104 lots Tuesday.

 

The open interest declined 282 lots to 371,116 lots Wednesday.

 

Corn, palm oil and soy oil futures settled lower while soy meal futures settled mixed.

 

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          3,671       Up   18       583,192

Corn              Sep 2009          1,662       Dn    4         38,990

Soy Meal        Sep 2009          2,973       Up   17       764,442

Palm Oil         Sep 2009          6,578       Dn   22       304,850

Soy Oil           Sep 2009         7,426       Dn   36       701,096