Tuesday: China soy futures inch up; technical rebound, CBOT gains

 

 

Soy futures rebounded on the Dalian Commodity Exchange Tuesday, tracking small gains on the Chicago Board of Trade.

 

With oil prices and a weaker dollar showing signs of stabilizing, the benchmark May 2010 soy contract rose 0.6% to settle at CNY3,583 a metric tonne.

 

"The rebound on CBOT wasn't big, but it was enough," said Liu Xinghua, an analyst with Great Wall Futures.

 

Dalian's technical recovery, after losing 1.4% Monday as U.S. tariffs on Chinese tires drubbed sentiment across the commodity complex, was driven by shortsellers closing out positions after two days of losses, Liu said.

 

Chicago Board of Trade soy futures closed with mixed results Monday, but attention was focused on gains made by its November contract, which closed up six cents at US$9.09.

 

Following remarks by the Ministry of Commerce Tuesday that emphasized the World Trade Organization as a preferred dispute resolution mechanism, soy traders regained some confidence that Beijing wasn't poised to open a trade war with the U.S. A protectionist spiral could potentially affect soy, which the U.S. exports to China.

 

"The tire tariffs have more of an effect on rubber, but not that much on soy," Liu said.

 

Corn, soymeal, palm oil and soyoil futures posted gains Tuesday.

 

Tuesday'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      3,583        Up   21        132,968

Corn       May 2010      1,734        Up    1         88,676

Soymeal  May 2010      2,717        Up   21        916,612

Palm Oil   May 2010      5,812        Up   22       289,772

Soyoil      May 2010      6,906        Up   40       355,834