July 28, 2009

 

Soy futures traded on the Dalian Commodity Exchange settled higher Tuesday, with analysts saying it could be due to speculative funds.

 

The benchmark May 2010 soy contract settled RMB12 a metric tonne higher at RMB3,514/tonne.

 

Analysts said fundamentals for vegetable oil and oilseeds products are negative, which shouldn't have supported such an overall rise.

 

Speculative funds started flowing into agricultural products after having profited from metals, and they usually don't care about fundamentals, said an analyst with China National Cereals Trade Corp.

 

But such a rise is unlikely to last long, as it lacks support from fundamentals, he added.

 

The government is now selling agricultural products such as corn and soy to the market, which is somewhat weighing on prices.

 

It sold 928,300 tonnes of corn Tuesday, or 48% of the 1.94 million tonnes it planned to sell. The average price was RMB1,590/tonne, down from RMB1,600/tonne last week.

 

Trading volume for all soy contracts rose to 157,146 lots from 154,786 lots Monday.

 

Open interest fell 10,900 lots to 379,034 lots.

 

Corn futures, soymeal futures, palm oil futures and soyoil futures all 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              May 2010         3,514        Up   12         157,146

Corn             Jan 2010          1,624        Up    4           65,278

Soymeal        Jan 2010         2,827         Up   11     1,105,754

Palm Oil         Jan 2010         5,764        Up  126        891,776

Soyoil            Jan 2010         7,110        Up  100        875,800