July 13, 2009
Monday: China soy futures decline on technical, supply pressure
Soy futures settled slightly lower on the Dalian Commodity Exchange Monday, retreating under technical pressure after Friday's gains as supply concerns continued to build.
The benchmark January 2010 soy contract fell 0.1% to RMB3,533 a metric tonne.
"The decline was minimal given that the sell down is technical in nature, but there is still supply pressure on the market," said Gao Yanrong, research manager for Dalu Futures.
China's soy imports soared to a record in the first half of this year, rising 28% on year to 22.1 million metric tonnes, the General Administration of Customs said Friday.
The government is still holding on to sizeable soy stocks, further weighing on market sentiment.
Despite the state soy reserves, market participants remained fairly bullish on soy's long-term demand in Asia.
"The demand for animal feed and oils in Asia, notably Vietnam and Indonesia, is growing at a steady pace...The long-term outlook for soy products in Asia is bullish, though China will have to start releasing its stockpiles at some point," said John Lindblom, Asia regional director of the U.S. Soy Association.
"China's reserves could set a bearish tone in the near term. (China is) buying more than it can consume," Lindblom said.
Chicago Board of Trade soy futures fell on the electronic bourse Monday, though they ended mixed Friday as most contracts recovered on speculative short covering from sharp declines earlier.
Corn and soymeal futures on Dalian rose Monday, while palm oil and soyoil futures settled lower.
Monday'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 3,533 Dn 3 101,498
Corn Jan 2010 1,627 Up 6 99,790
Soymeal Jan 2010 2,815 Up 16 1,385,720
Palm Oil Jan 2010 5,568 Dn 2 567,584
Soyoil Jan 2010 6,948 Dn 4 908,318
