Thursday: China soy futures settle lower; tracking weak equities

 

 

Soy futures traded on the Dalian Commodity Exchange settled lower Thursday, tracking declines in Chinese equities.

 

The benchmark May 2010 soy contract settled RMB20 a metric tonne, or 0.5% lower, at RMB3,706/tonne.

 

The benchmark Shanghai Composite Index ended down 0.7% at 2946.40, after rising 1.8% Wednesday, on plans for equity fund raising by several large companies.

 

China's agricultural commodities have tracked stocks recently as markets have been driven by ample cash liquidity.

 

Prices are expected to consolidate in the near term, analysts said. They said large government stocks and fears of government price interventions are offset by concerns related to drought conditions in major producing areas in the northeast.

 

China's National Development and Reform Commission, the country's economic planner, said Thursday that inflationary expectations have risen due to recent price increases, high credit growth, and the stock market and property rebound.

 

The commission said local pricing regulators should closely monitor movements in market prices and maintain stable prices for some key commodities.

 

Trading volume of all soy contracts declined to 141,270 lots from 197,430 lots Wednesday.

 

Open interest fell 2,170 lots to 304,406 lots Thursday.

 

Soymeal futures, soyoil futures and palm oil futures all settled lower.

 

Corn futures bucked the trend to settle higher following news that the government will sell 5.77 million tonnes of corn from reserves to large industrial processing plants in major producing areas of the north and northeast.

 

The news eased market concerns about supply pressure from the tens of millions of tonnes in government reserves, as the corn will only be sold to certain companies, analysts said.

 

The corn will be sold to industrial processors with an annual capacity of at least 100,000 tonnes in the north and northeast, an official at a local grain administration said Thursday.

 

Trading volume in corn futures jumped to 616,908 lots Thursday from 184,810 lots the previous day.

 

Following are Thursday'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      3,706        Dn       20        141,270

Corn         May 2010      1,751        Up        14        616,908

Soymeal    May 2010      2,891        Dn       18        919,374

Palm Oil    May 2010      6,482        Dn        40        441,730

Soyoil       May 2010      7,578        Dn        10        681,290