Tuesday: China soy futures settle down; correction was due -analyst

 

 

China's soy futures traded on the Dalian Commodity Exchange settled lower Tuesday, as external market movements spurred a correction in prices after recent sustained gains.

 

The new benchmark September 2010 soy contract settled 0.6% lower at RMB3,705 a metric tonne.

 

Soy futures have risen in most sessions since markets reopened after the National Day holiday in early October, supported by expectations of favorable government policies.

 

"There is a need for a correction, and the general fall in outside markets, including (local) equities, helped that," said Gao Yanrong, an analyst with Dalu Futures.

 

Trading was light, and there were no significant signs of fund inflows.

 

The fall could be a bargain-hunting opportunity, and soy futures could rise further, Gao added.

 

Expectations of higher crude oil prices, increasing soyoil demand ahead of the year-end holidays and the likely hood of rising inflation may all contribute to higher agricultural product prices.

 

Trading volume of all soy contracts declined to 127,638 lots from 230,854 lots Monday.

 

Open interest fell 430 lots to 272,912 lots Tuesday.

 

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

 

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        Sep 2010      3,705        Dn     22        127,638

Corn       May 2010      1,742        Dn     6          60,968

Soymeal  May 2010      2,848        Dn    32      1,191,844

Palm Oil   May 2010      6,144        Dn    98        212,884

Soyoil     May 2010      7,270        Dn     94        705,084