Wednesday: China soy futures settle up on CBOT; lack of clear cues

 

 

China's soy futures traded on the Dalian Commodity Exchange settled higher Wednesday on the Chicago Board of Trade's gains overnight, with the market continuing to consolidate in the absence of clear trading guidance.

 

The benchmark September 2010 soy contract settled RMB5 higher at RMB3,739 a metric tonne, up 0.1%.

 

The contract opened higher, along with the CBOT, but moved above and below yesterday's settlement price due to the lack of external cues.

 

"The market is likely to consolidate for a while in the absence of clear guidance in the near term," said Wang Xiaoguang, an analyst with Galaxy Futures Co.

 

Farmers are still reluctant to sell their crop as they expect a favorable government purchase policy, and this has pushed cash prices higher.

 

However, it is very difficult for the benchmark contract to break through RMB3,800/tonne before the government launches detailed purchasing plans, said a local analyst.

 

The government sold 2,400 tonnes of soy during its weekly auctions Wednesday, or 0.5% of the 500,500 tonnes it offered to sell.

 

The trading volume of all soy contracts declined to 224,936 lots from 356,912 lots Tuesday.

 

The open interest fell 2,380 lots to 277,152 lots Wednesday.

 

Corn futures settled lower, while soymeal, palm oil and soyoil futures settled higher.

 

Wednesday's settlement prices in yuan a tonne for benchmark contracts and volume for all contracts in lots (one lot is equivalent to 10 tonnes):

 

Product  Contract  Settlement Price  Change     Volume

 

Soy         Sep 2010      3,739        Up    5    224,936

Corn       May 2010      1,737        Dn    3     47,626

Soymeal  May 2010      2,853        Up   17    784,212

Palm Oil   May 2010      6,116        Up   24    139,642

Soyoil      May 2010      7,304        Up   44    521,082