Friday: China soy futures inch down; lack direction, supply certainty
Soy 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% lower at RMB3,625 a metric 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 U.S.
"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 as the market awaited fresh news on supply-demand fundamentals.
Prospects for a record 2009 crop in the U.S. 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 U.S. 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.
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 3,625 Dn 11 306,928
Corn May 2010 1,722 Dn 6 81,996
Soymeal May 2010 2,711 Dn 3 842,658
Palm Oil May 2010 5,818 Dn 2 214,200
Soyoil May 2010 6,900 Up 10 401,650
