June 8, 2011
Tuesday: China's soy futures decline, tracking weak CBOT
Soy futures on the Dalian Commodity Exchange fell Tuesday (Jun 7) in a broad commodities decline, tracking a sharp fall in soy on the Chicago Board of Trade as US crop weather improved and traders took profits.
The benchmark January contract settled 0.5% lower at RMB4,477 (US$690)/tonne, snapping a two-day rally. July CBOT soy slipped 2.2% overnight to close at US$13.8325 a bushel.
A decline in crude-oil prices and a firmer US dollar added pressure to CBOT soy prices, analysts said.
China will likely extend edible oil price caps, which expired end-May, as inflation pressure due to high pork and vegetable prices persists, analysts said.
The government recently approved sales of more than two million tonnes of soy at RMB3,300-3,500 (US$509-540)/tonne to selected large-sized crushers, further pressuring prices, it said.
But some market participants said Beijing may not extend the caps as negative margins have weighed on Chinese soy crushers for a long time, even forcing many of them to suspend operations.
Demand for soymeal in China, the world's biggest consumer of the animal feed, may rise on expectations that hog inventories will expand amid high pork prices, which have gained more than 20% this year.
