July 30, 2009

China's soy futures traded on the Dalian Commodity Exchange settled little changed Thursday as traders stayed on sidelines, awaiting government policies.

 

The benchmark May 2010 soy contract settled RMB1 lower at RMB3,527 a metric tonne.

 

The market was more cautious after the government failed to sell soy from reserves for the second time this week as auction prices remained high.

 

Many market participants expected the government to provide subsidies to local soy crushers in order to release its stocks at higher-than-market prices, which will bring supply pressure to the market.

 

Cash traders are reluctant to sell their soy on dwindling supply, while low temperature and heavy rain in the northeast producing areas are likely to hit this year's soy output, said analysts.

 

Soy and soy product prices are likely to remain weak in the near term, said Tianqi Futures in its note.

 

The trading volume of all soy contracts declined to 119,904 lots from 168,676 lots Wednesday.

 

The open interest fell 14,794 lots to 351,998 lots Thursday.

 

Corn futures and palm oil futures settled lower, while soymeal and soyoil futures settled higher.

 

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

                            

Contract       Settlement       Price        Change        Volume

Soy              May 2010        3,527        Dn    1         119,904

Corn             Jan 2010        1,617         Dn    3          57,348

Soymeal       May 2010        2,827        Up   23      1,880,358

Palm Oil        Jan 2010         5,754        Dn   28        578,982

Soyoil           May 2010        7,200        Up   10        695,768