August 17, 2009
Monday: China soy futures fall as US data hit global markets
Soy futures fell sharply on the Dalian Commodity Exchange Monday, as global commodities and equities markets were swamped by Friday's weaker-than-expected U.S. economic data.
The benchmark May 2010 Soy contract lost 3.6% to RMB3,650 a tonne.
"The entire complex fell due to financial market instability, along with equities and all Asian markets," said Xu Wenjie of Tianma Futures.
The U.S. data late last week showed consumer prices falling at their fastest rate in more than 50 years, even as U.S. jobless claims rose.
Soy futures on the Chicago Board of Trade ended sharply lower Friday, falling to two-week lows amid speculative selling. The sell-off continued into Asian trading hours Monday on CBOT's electronic bourse.
Some recent agricultural data suggest the demand picture isn't so bleak. Weekly U.S. Department of Agriculture export sales data last week showed continued strong demand for Soy and corn exports, Barclays Capital said in a note late Friday.
In China, however, supply pressure on prices is starting to build ahead of the Soy harvest expected to start this month, Xu said.
News that major Soy- and corn-producing areas are facing a serious drought, which would normally support prices, was insufficient to offset the effects of weak U.S. economic data on sentiment, Xu said.
The drought is affecting five northern and northeastern provinces, covering an area that accounts for around a third of China's autumn grain output, the Ministry of Agriculture said over the weekend.
Soymeal, palm and soyoil futures fell Monday, while corn settled flat.
Following are Monday'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 3,650 Dn 135 369,442
Corn May 2010 1,718 0 1,036,290
Soymeal May 2010 2,832 Dn 126 1,569,452
Palm Oil May 2010 6,338 Dn 250 768,972
Soyoil May 2010 7,422 Dn 248 1,299,106
