Tuesday: China soy futures settle steady; profit-taking pares gains
China's soy futures traded on the Dalian Commodity Exchange settled little changed Tuesday, as traders took profits from earlier gains.
The benchmark September 2010 soy contract settled RMB1 higher at RMB3,779 a metric tonne.
The contract opened at the session high of RMB3,808/tonne, supported by the overnight jump at the Chicago Board of Trade, edged lower as profit-taking set in around the resistance level of RMB3,800 and closed at the session low of RMB3,763/tonne.
The fundamentals can't support such a sharp rise as the U.S. soy harvest is nearing an end, while drought in Argentina will likely ease with expected rainfall next week, analysts said.
The U.S. soy futures contract faces immediate resistance at $10.20 per bushel, Galaxy Futures said in a note.
The government is expected to purchase new soy at RMB3,740/tonne, based on recent market talk, higher than last year's RMB3,700/tonne--but the quality bar will be set higher than last year. If the talk pans out, it would mean many farmers won't get the prices they have been holding out for.
Market expectations previously put the government price around RMB3,750/tonne, and the new talk hasn't helped market sentiment, said Gao Yunyue, an analyst with Zhejiang Dadi Futures Brokerage.
Trading volume of all soy contracts declined to 155,968 lots from 200,590 lots Monday.
Open interest fell 10,040 lots to 256,650 lots Tuesday.
Corn futures settled unchanged, while soymeal, soyoil and palm oil 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 Sep 2010 3,779 Up 1 155,968
Corn May 2010 1,763 Unch 90,844
Soymeal Sep 2010 2,863 Up 9 1,020,480
Palm Oil May 2010 6,410 Up 54 205,804
Soyoil Sep 2010 7,580 Up 70 879,576
