July 14, 2009
Tuesday: China soy futures extend losses on crude weakness, supply
Soy futures fell on the Dalian Commodity Exchange Tuesday, extending losses on supply concerns that were accentuated with weakening oil prices last week.
The benchmark January 2010 soy contract lost 0.3% to RMB3,521 a metric tonne.
"Soy's weakness in the last couple of days really began last week, when the U.S. Commodities Futures Trading Commission said the group might limit energy trading," said Xu Wenjie of Tianma Futures.
The commission said last week it would consider imposing position limits on energy commodities for speculators.
In a market grasping for fresh directional cues in the absence of major news on the agricultural commodities front, the consequent decline in crude prices took its toll on soy.
"Imports (into China) were still very high in June," Xu said. "Supply is plentiful in China, and that's causing price weakness as well."
China's soy imports rose 28% on year to 22.1 million tonnes in the first half of 2009, the General Administration of Customs said Friday.
Chicago Board of Trade soy futures ended lower Monday, retreating on bearish near-term weather forecasts and speculative liquidation.
More rain in the key crop growing areas of the Midwest is expected to keep pressure on prices, analysts said.
"Good weather in North America is still putting pressure on prices," Xu said.
Corn and soymeal futures on Dalian fell, while palm oil and soyoil futures settled higher.
Tuesday'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 3,521 Dn 12 79,236
Corn Jan 2010 1,625 Dn 2 39,890
Soymeal Jan 2010 2,789 Dn 26 1,276,068
Palm Oil Jan 2010 5,592 Up 24 612,864
Soyoil Jan 2010 6,970 Up 22 740,414
