June 24, 2009
Wednesday: China soy futures settle up; tracking gains on CBOT
China's soy futures traded on the Dalian Commodity Exchange settled slightly higher Wednesday, tracking a Chicago Board of Trade increase overnight.
The benchmark January 2010 soy contract settled 0.2% higher at RMB3,636/tonne.
The contract opened slightly higher, continuing yesterday's gains, but there wasn't enough momentum to sustain a rally as participants worried about the damping effect of an expected government release of domestic soy.
"The rise spurred by the elimination of export taxes was just a flash in the pan, and the market is still eyeing CBOT for further direction," said Yu Ruiguang, an analyst at Tianqi Futures.
China will eliminate export taxes on wheat, rice and soy from July 1 to encourage exports amid sluggish domestic demand.
Analysts described the move as a gesture to signal price support, rather than as having the potential to concretely affect the market.
A "rebound" in commodity prices in recent months is nearing an end as it becomes clear the overall global economy won't likely recover in the next year or two, said Fei Zhonghai, the general manager of CGOG Futures Co., a unit of grain trader Cofco Ltd., adding that commodity prices are very likely to test the bottom again later this year.
Trading volume of all soy contracts declined to 246,304 lots from 519,508 lots Tuesday.
Open interest fell 22,686 lots to 355,312 lots Wednesday.
Corn futures settled lower, while soymeal, soyoil and palm oil futures settled higher.
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 3,636 Up 7 246,304
Corn Jan 2010 1,623 Dn 4 86,022
Soymeal Jan 2010 2,848 Up 17 1,534,796
Palm Oil Jan 2010 6,008 Up 6 420,976
Soyoil Jan 2010 7,342 Up 12 805,320
