Monday: China soy futures fall; frost fizzles, goverment stocks weigh

 

 

Soy futures fell on the Dalian Commodity Exchange Monday, as a frost forecast proved premature and government stockpile sales continue to buffer prices.

 

The benchmark May 2010 soy contract saettled 0.8% lower at RMB3,706 a metric tonne.

 

Heilongjiang, a major northeastern producing province, issued a frost warning last week effective through Sept. 21, pushing prices higher.

 

"Since that forecast didn't pan out, prices fell back today," said Li Xiaoli, a soy analyst with Beite Futures.

 

Soy futures were also pulled lower by their counterparts at the Chicago Board of Trade, which settled lower Friday amid a similarly decreased threat of freezing weather.

 

Meanwhile, sales of state soy stocks in the northeast continue to keep prices on an even keel.

 

Last week, China's grain authorities sold 15,500 metric tonnes of soy in their weekly auction of state reserves of the commodity, or 3.1% of the stock on offer, the National Grain and Oil Information Center said.

 

While the government hasn't enjoyed high success rates in its sales, the supply has kept prices stable.

 

But there's still no news on whether the government plans to purchase soy stocks for the next crop year, Li said.

 

China's Minister of Agriculture Sun Zhengcai said at a news conference Monday morning that China's prospective harvest of autumn crops should be good, barring any major disasters in the latter half of this year.

 

Farmers are making good progress in harvesting corn, soy and rice so far, he said.

 

About 39% of the rice crop has been harvested so far, along with 25% of corn and soy crops.

 

Speaking to reporters, Sun moderated concerns that China would target U.S. soy exports after the U.S. slapped punitive tariffs on Chinese tire exports Sept. 11, though he stopped short of entirely ruling out trade action.

 

He said he was bound for the U.S. Monday afternoon to discuss agricultural trade issues.

 

Corn, soymeal, palm oil and soyoil futures posted declines Monday.

 

Monday'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     29         480,024

Corn       May 2010      1,745       Dn      2          82,474

Soymeal  May 2010      2,780       Dn     21         877,010

Palm Oil  May 2010      5,994        Dn    14          328,184

Soyoil     May 2010      7,074        Dn    22          466,018