June 2, 2009
Tuesday: China soy futures settle up on strong CBOT, crude oil
China's soy futures traded on the Dalian Commodity Exchange settled higher Tuesday, in tandem with gains at the Chicago Board of Trade overnight and supported by the external markets.
The benchmark January 2010 soy contract settled RMB12 a metric tonne, or 0.3%, higher at RMB3,757/tonne.
Benchmark July soys on CBOT breached US$12 a bushel overnight after setting an open-outcry session high of US$12.26, its highest price since Sept. 26.
Higher commodities prices, in line with strong crude oil and dollar weakness, reflected inflation concerns, said an analyst with a large local oil and fat company.
Low soy stock levels and strong Chinese demand also helped support prices.
Soy prices could move even higher in nearby contracts, although prices may ease if profit-taking sets in and non-commercial investor interest subsides, Rabobank said in a note.
"The weaker US dollar, which is favouring commodity prices in general, will remain supportive to soy prices," it said.
But domestic soy futures price gains lag behind counterparts on CBOT as traders are concerned the government may sell its millions of state reserves before the next harvest.
Buying long is now riskier than selling short given the recent price rise, the local analyst said.
Trading volume of all soy contracts declined to 364,694 lots from 477,058 lots Monday.
Open interest rose by 1,882 lots to 383,576 lots Tuesday.
Corn, palm oil, soyoil and soymeal futures all 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 3,757 Up 12 364,694
Corn Jan 2010 1,678 Up 15 105,046
Soymeal Sep 2009 3,111 Up 64 1,257,532
Palm Oil Jan 2010 6,702 Up 116 308,930
Soyoil Jan 2010 7,896 Up 108 1,388,772
