July 9, 2009

Soy futures traded on the Dalian Commodity Exchange settled slightly higher Thursday on technical buying after yesterday's tumble.

 

The most actively traded January 2010 soy contract settled RMB12 a metric tonne higher at RMB3,531/tonne, up 0.3%.

 

Analysts said Dalian soy contracts will likely be rangebound in the coming sessions in the absence of major macroeconomic data or fresh news related to supply-and-demand fundamentals.

 

"Soy and other soy products are completely out of directional cues these days, so it's natural to see them fluctuate," said Gao Yanrong, an analyst with Dalu Futures.

 

Analysts said increasing planting acreage will likely weigh on soy contracts in the medium term as oversupply concerns loom.

 

In the near term, the crop's price direction will largely be correlated with currency and equities markets, as the outlook for demand will depend on whether a sustained economic recovery lies ahead.

 

"Investors are just looking for clear signs of recovery in macroeconomic data so they can make decisions as to whether to buy and what to buy," said Gao.

 

Trading volume for all soy contracts declined to 118,572 lots from 182,632 lots Wednesday.

 

Open interest fell 1,748 lots to 348,278 lots.

 

Corn futures and soyoil futures settled slightly higher, and soyoil futures settled marginally lower. Palm oil futures were unchanged.

 

Thursday's settlement prices for benchmark contracts in yuan a metric tonne and volume for all contracts in lots (One lot is equivalent to 10 tonnes):

                      

Contract       Settlement    Price      Change      Volume

Soy              Jan 2010      3,531      Up  12        70,150

Corn             Jan 2010     1,605       Up  1         31,324

Soymeal       Jan 2010      2,777       Up  4       949,616

Palm Oil        Jan 2010      5,542      Unch        547,654

Soyoil           Jan 2010      6,922      Dn  4       669,170