Friday: China soy futures up on more fost-frost warning purchasing
Soy futures were higher on the Dalian Commodity Exchange Friday on follow-through buying after Heilongjiang province's frost warning Thursday, although some paring occurred due to spillover negative sentiment from Chinese equity markets.
The benchmark May 2010 soy contract settled 1.5% higher at RMB3,735 a metric tonne.
Analysts said Dalian soy will likely be able to maintain upward momentum before the 60th anniversary of the founding of the People's Republic of China on Oct. 1 given that supply concerns over the frost warning in the country's largest soy producer will lend support to the crop's price in the near term.
"Most participants are pretty bullish, largely because of the weather factor, and along with some speculative fund buying, soy will definitely go further north in the near term," said Gao Yanrong, an analyst with Yong An Futures.
Soy contracts gave back some early gains in the afternoon session, dragged down by weak Chinese stock markets that ended sharply lower due to fund selling and profit-taking.
Analysts said soy will continue to take cues from other financial markets in coming sessions regardless of supply-and-demand fundamentals.
"Since the beginning of this year, agriculture products have closely followed the ups and downs of external markets," Gao said. "We have too much money floating in the market, which makes investors ignore fundamentals - and it seems to me that this will continue to be the case for the rest of the year."
Soymeal, palm oil and soyoil futures settled mostly higher Friday while corn futures contracts settled nearly unchanged.
Friday'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 3,735 Up 55 799,072
Corn May 2010 1,747 Up 4 197,788
Soymeal May 2010 2,801 Up 18 1,550,490
Palm Oil May 2010 6,008 Up 14 477,132
Soyoil May 2010 7,096 Up 26 659,232
