June 17, 2009
Wednesday: China soy futures mostly rise on dollar, higher import prices
Soy futures on the Dalian Commodity Exchange mostly rose Wednesday on a weaker dollar and more expensive imports.
The benchmark January 2010 soy contract was unchanged at RMB3,645 a metric tonne, though other contracts rose between RMB1/tonne and RMB13/tonne.
"As soy futures on the Chicago Board of Trade gradually find more resistance, domestic soy prices are strengthening because futures here are relatively underpriced," said Xu Wenjie of Tianma Futures.
Import prices average RMB4,200/tonne, Xu said.
Higher global prices are supporting local prices and may slow a recent streak of near-record levels of soy imports.
"In soy, the recent trend of strong imports into China might ease in the months ahead," Barclays Capital said in a note late Tuesday.
"According to the China National Grain and Oils Information Centre, imports for (the) 2009-2010 (crop year starting Oct. 1) are expected to fall to 37 million tonnes from 40 million tonnes projected for this year, as the government is likely to release some of its reserves," the note said.
There is market speculation that the government is poised to release about 5 million tonnes of soy at a price no lower than RMB3,700/tonne, but so far, government sales have not yet begun, Xu said.
Soy futures on the Chicago Board of Trade consolidated gains Tuesday, but were well off highs. Weakness in the U.S. dollar powered prices higher initially, but the rally ran out of steam later in the session.
Meanwhile, Chinese demand for soymeal and soyoil is expected to remain relatively robust in the months ahead, Barclays said.
Corn, soymeal and palm oil futures posted gains, but soyoil futures lost 0.2% Wednesday.
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 3,645 Unch 134,914
Corn Jan 2010 1,624 Up 7 115,522
Soymeal Jan 2010 2,906 Up 2 1,616,360
Palm Oil Jan 2010 6,270 Up 10 245,028
Soyoil Jan 2010 7,592 Dn 12 875,140
