Tuesday: China soy futures settle tad up on CBOT rally, goverment policy

 

 

China's soy futures traded on the Dalian Commodity Exchange settled slightly higher Tuesday, supported by sharp gains at the Chicago Board of Trade overnight.

 

Dollar weakness and a delayed harvest were reasons for traders to buy in, but the upward momentum faltered, with the benchmark May 2010 soy contract edging lower after early morning gains to close in negative territory. It settled 0.3% higher at RMB3,685 a metric tonne.

 

The government said late Monday that it would continue to buy soy and corn from farmers this year, to protect their interests, but didn't provide any details.

 

The policy, though nominally price-supportive, was expected and therefore didn't have much impact on the market, analysts said.

 

"Corn prices are likely to consolidate in the near term," unless the government further elaborates on its policies, said Li Lei, an analyst with Cofco Ltd.'s hedge department.

 

China's national grain stocks have been building since the 2008 harvest on the back of high-volume government purchases, with grain prices mostly taking cues from state-set purchase prices so far this year.

 

Trading volume of all soy contracts rose to 247,988 lots from 232,556 lots Monday.

 

Open interest fell 7,888 lots to 280,692 lots Tuesday.

 

Corn, soymeal, palm oil and soyoil futures all settled higher.

 

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      3,685        Up      11         247,988

Corn       May   2010      1,736        Up     17        169,640

Soymeal  May  2010      2,837        Up       8        1,287,558

Palm Oil  May   2010      6,010        Up     30         242,084

Soyoil     May   2010      7,094        Up     38         662,460