June 3, 2009
Wednesday: China soy futures settle down on profit-taking
Soy futures traded on China's Dalian Commodity Exchange settled lower Wednesday, as traders took profits on recent gains.
The benchmark January 2010 soy contract settled RMB11 a metric tonne lower at RMB3,746/tonne, or down 0.3%.
The contract had risen for nine consecutive sessions on favorable fundamental factors such as a tightening in global ending stocks and a drought in major soy producing areas in China's northeast.
After the slight correction, investors headed for the sidelines to wait for buying opportunities.
The upward momentum in soy prices hasn't waned, and any declines could bring opportunities to buy again, Tianqi Futures said in a note.
The drought in the northeast continues, and domestic soy supplies remain limited.
Light recent rains in the northeast weren't sufficient to ease the drought, which started in late April, a local grain official said Wednesday.
Trading volume of all soy contracts declined to 308,612 lots from 364,694 lots Tuesday.
Open interest fell 13,672 lots to 369,904 lots Wednesday.
Corn futures, soymeal futures and soyoil futures settled higher, while palm oil futures settled lower.
High soy import costs helped to limit the downside for soy prices, and supported soymeal and soyoil prices.
Soy product contracts also needed to catch up with recent gains in soys, analysts said.
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 3,746 Dn 11 308,612
Corn Jan 2010 1,681 Up 3 103,570
Soymeal Sep 2009 3,156 Up 45 1,758,182
Palm Oil Jan 2010 6,682 Dn 20 242,482
Soyoil Jan 2010 7,904 Up 8 807,808
