July 31, 2009
Friday: China soy futures settle up on liquidity rise, CBOT gains
China's soy futures traded on the Dalian Commodity Exchange settled higher Friday on high liquidity and tracking an overall rise in commodities and equities markets.
The benchmark May 2010 soy contract settled RMB63 higher at RMB3,590 a metric tonne, or up 1.8%.
The big rise overnight in Chicago Board of Trade counterparts, the limit-up in major industrial product futures and a jump in the stock market in China Friday all helped push the agricultural market higher.
China's moderately loose monetary policy allowed money to flow into the capital market, and the overall rise "fully reflected a fund-boosted market," said Li Dongji, an analyst with Guotai Jun'an Futures Brokerage, adding the capital market will continue to be flooded with liquidity in the second half of the year.
The official Xinhua News Agency quoted an unnamed central bank official as saying Thursday the People's Bank Of China needs to maintain its moderately loose monetary policy as the recovery of the domestic economy is at a critical stage.
But "in dealing with the current emergence of inflation expectations, going forward we need to maintain prices within a reasonable and controllable scope," the PBOC official said, according to Xinhua.
The latest remarks come as the rapid growth in lending raises concerns over the potential for asset-price bubbles and inflation.
The trading volume of all soy contracts rose to 239,986 lots from 119,904 lots Thursday.
The open interest fell 20,024 lots to 331,974 lots Friday.
Corn, soymeal, palm oil and soyoil futures all settled higher.
Friday's settlement prices in yuan a 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 3,590 Up 63 239,986
Corn May 2010 1,656 Up 10 143,946
Soymeal May 2010 2,916 Up 89 2,459,884
Palm Oil Jan 2010 5,896 Up 142 613,950
Soyoil May 2010 7,394 Up 194 1,002,204
