May 27, 2011

Soy futures rose marginally on the Dalian Commodity Exchange Thursday (May 26) in a broad commodities rally, as increasing domestic demand and reduced acreage underpinned prices.

The most actively traded January soy contract gained 0.5% to settle at RMB4,457 (US$687)/tonne. July CBOT soy closed 0.3% higher at U$13.77 a bushel overnight on concerns about acreage and yield reductions due to delayed soy seeding because of wet weather.

Domestic edible oil prices will likely to gain an upward momentum as the National Development and Reform Commission may from June lift price caps on edible oils it introduced last December to combat inflation, analysts said.

Soy prices have risen in some producing areas as crushing demand is increasing, but traders remain cautious as the policy outlook is still unclear, experts said.

Soy acreage this year is also likely to fall 6.8% to 8.2 million hectares, the China National Grain & Oils Information Centre said in its May estimate Tuesday.

China's soy output this year will likely reach 14 million tonnes, a decrease of 7.9% compared with 2010, it said.