China soy futures inch down; lack direction, supply certainty

 

 

Soyb futures drifted lower on the Dalian Commodity Exchange Friday, lacking real direction as a stronger dollar added to uncertainties over weather and crop sizes.

 

The benchmark May 2010 soy contract settled 0.3-percent lower at RMB3,625 a tonne.

 

With the dollar appearing to strengthen, the market is tending toward short positions, said Tu Xuan, an analyst with Shanghai JC Intelligence Co.

 

Frost concerns in northeastern producing areas continue to cast doubts on soy crop sizes, reflecting a similar situation in the US.

 

"The uncertainty over output volume is weighing on prices," Tu said.

 

Participants in the spot market were also largely on the sidelines as there was little trade in old crops, apart from state reserve sales. The new soy crop is due toward the end of October, Tu said.

 

Soy futures on the Chicago Board of Trade ended mixed Thursday (Sept 24) as the market awaited fresh news on supply-demand fundamentals.

 

Prospects for a record 2009 crop in the US remains an anchor on prices, and with only mild frost threats on the horizon, buyers continue to take a cautious approach.

 

"Market attention continued to be focused on weather conditions in the US Midwest, with forecasts for the next five days indicating a very low risk of frost," Barclays Capital said in a note late Thursday.

 

Corn, soymeal and palm oil futures posted declines Friday, while soyoil futures gained slightly on holiday demand.