Friday: China soy futures settle down; market eyes USDA report

 

 

Soy futures traded on the Dalian Commodity Exchange settled lower Friday as the market waited for the U.S. Department of Agriculture's supply and demand report to be released.

 

The benchmark September 2010 soy contract settled RMB10 a metric tonne lower at RMB3,717/tonne.

 

Its Chicago Board of Trade counterpart tumbled overnight amid expectations of an unfavorable USDA report Tuesday.

 

Trade forecasts for US corn and soy production have generally been lowered, reflective of unfavorable harvest conditions.

 

Yet despite the reduction, many private trade estimates for US soy production are still higher than the USDA's, indicating that the bias is for the USDA to upwardly revise its estimate of soy production Tuesday to a fresh record high, Commonwealth Bank of Australia said in a research note Friday.

 

Trade estimates forecast U.S. soy stocks to rise 3.5% from last month's estimate and up 72% from last year's actual number, according to Commonwealth.

 

DCE soy contracts are likely to remain in consolidation during the fourth quarter amid U.S. supply pressure and the Chinese government's favorable soy purchase policy, said Galaxy Futures Co. in a note.

 

Trading volume for all soy contracts rose to 121,644 lots from 121,234 lots Thursday.

 

Open interest fell 886 lots to 271,132 lots.

 

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

 

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         Sep 2010      3,717        Dn   10      121,644

Corn       May 2010      1,734        Dn    1        44,580

Soymeal  May 2010      2,851        Dn    2       694,844

Palm Oil  May 2010      6,176        Up   40       185,464

Soyoil     May 2010      7,292        Up   12       514,664