June 20, 2011

Soy futures on the Dalian Commodity Exchange extended its decline for the third consecutive session Friday (Jun 17) and rising fears about softer domestic demand in the event of another round of credit tightening.

An overnight fall in CBOT soy futures which fell on better US crop weather and a firm dollar also weighed on sentiment.

The benchmark January soy contract settled 0.7% lower at RMB4,413 (US$681)/tonne. July CBOT soy closed down 1.3% at US$13.505/bushel Thursday.

Soy prices may remain weak on supply pressure, with port inventories increasing by 260,000 tonnes from a week earlier to around 6.5 million tonnes, according to Chinese Grain Network, a consultancy owned by the state China Grain Reserves Corp.

China's soy crushing industry has been incurring losses since the start of the year on negative profit margin and domestic price caps imposed by the government to fight inflation, the China National Grain & Oils Information Centre said.