August 30, 2011

China's farm product futures show strong rebound 

Chinese agricultural commodities futures on Dalian and Zhengzhou commodity exchanges showed a strong rebound momentum and generally ended higher Monday (Aug 29), tracking a sharp rise on CBOT Friday.

Soy futures posted the most gains boosted by rising market confidence as CBOT soy broke the resistance of 1,400 cents/bushel and hit the record high this year Friday. The May soy futures traded on the Dalian Commodity Exchange soared 2.75% to end at RMB4,747/tonne (US$743.40) and the May soyoil contract ended 2.05% higher to RMB10,334/tonne (US$1,618.35).

Meanwhile, soy prices were also propped by holiday purchases for the coming Mid-Autumn Festival around the middle of September.

However, analysts say that high level of inventories at domestic ports will suppress rise room of soy prices in the short term, adding that Dalian soy may continue to underperform that on CBOT.

Grain futures extended steady rise, with January wheat contract up 0.75% to end at RMB2,702/tonne (US$423.15) and January early rice up 0.62% to RMB2,585/tonne (US$404.82).