June 4, 2009

A sharply stronger dollar sent agricultural futures lower on the Dalian Commodity Exchange Thursday.

 

The benchmark January 2010 soy contract fell 0.7% to settle at RMB3,720 a metric tonne.

 

"The dollar's strengthening overnight depressed all commodities," said Li Xiaoli, an analyst with Beite Futures.

 

Soy futures on the Chicago Board of Trade fell Wednesday, with the market consolidating its gains on speculative profit-taking.

 

A further near-term correction amid choppy market conditions can't be ruled out, but supportive supply-side developments are likely to provide a floor to grains prices, Barclays Capital said in a note late Wednesday.

 

Soys were left without fresh news for upside cues, though fundamentals remained the same, Li said.

 

Persistent worries over global macroeconomic conditions were also behind the commodities retreat Thursday, said Wang Shaoguang of Galaxy Futures.

 

Still, Chinese demand is projected to stay steady in 2009, Wang said.

 

"Government stockpiling had helped reinforce demand conditions for soys, so domestically, things aren't too bad," he said.

 

The Ministry of Commerce said last month that May imports of soys are expected to hit a record 4.29 million tonnes, continuing a streak of strong soy imports so far this year.

 

Corn, palm oil and soyoil futures all posted declines Thursday, while soymeal rose 0.5%.

      

Thursday's settlement prices in yuan a metric tonne for benchmark contracts and the volume for all contracts in lots (One lot is equivalent to 10 tonnes):

                                         

Contract      Settlement      Price        Change         Volume

Soy              Jan 2010       3,720        Dn   26        345,304

Corn            Jan 2010       1,678         Dn    3         117,848

Soymeal       Jan 2010       2,997        Up   16      2,532,244

Palm Oil        Jan 2010       6,538        Dn  144        205,452

Soyoil           Jan 2010       7,792        Dn  112        668,132