June 9, 2009
Tuesday: China soy futures settle down on supply pressure concerns
China's soy futures traded on the Dalian Commodity Exchange settled lower Tuesday as supply concerns weighed on the market even as counterparts at the Chicago Board of Trade held firm.
The benchmark Jan 2010 soy contract settled RMB36 a metric tonne, or 1.0%, lower at RMB3,698/tonne.
The contract opened down slightly, but soon doubled its foray into negative territory on supply pressure.
Traders took cues from rumored sales of soys from government reserves and expected ample soy imports in deciding not to follow the CBOT benchmark contract uptrend.
China's soy imports in June will likely to reach a record-high level of 4.62 million metric tonnes, according to a report by the Ministry of Commerce issued Monday.
CBOT isn't susceptible to sharp declines as long as the Chinese government doesn't sell its millions of tonnes of stockpiled soys, said a local analyst with an oil and fat company.
Although rumors of government stock sales have been circulating, there aren't any specific volumes being mentioned.
At 0816 GMT, the July soy contract on e-CBOT was up 0.5% at US$12.39 a bushel after settling 0.6% higher on CBOT overnight.
Most agricultural crops contracts traded on the DCE recovered some of their losses towards the closing bell, moving in tandem with external markets.
"The equities market led commodities (today)," said Li Dongji, an analyst at Guotai Jun'an Futures Brokerage.
Major stock indexes and most metal futures traded on the Shanghai Futures Exchange exhibited "V" style charts Monday.
Trading volume of all soy contracts rose to 328,022 lots from 254,976 lots Monday.
Open interest declined 7,856 lots to 351,760 lots Tuesday.
Corn, soymeal, soyoil and palm oil futures all settled lower.
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 3,698 Dn 36 328,022
Corn Jan 2010 1,629 Dn 9 230,468
Soymeal Jan 2010 2,995 Dn 51 2,305,500
Palm Oil Jan 2010 6,520 Dn 50 262,100
Soyoil Jan 2010 7,816 Dn 28 820,792
