Tuesday: China soy futures settle tad lower; arbitrage needs

 

 

China's soy futures traded on the Dalian Commodity Exchange settled slightly lower Tuesday as buyers sold positions due to arbitrage needs.

 

The benchmark September 2010 soy contract settled RMB2 lower at RMB4,028 a metric tonne.

 

The contract opened higher, but edged lower during the session, and ended a choppy session slightly below yesterday's settlement price.

 

There are arbitrage needs above RMB4,000/tonne, which prevent prices from rising further, said Galaxy Futures in an analysis note, adding more buyers may choose to reduce long positions around RMB4,000/tonne.

 

DCE soy's future trend will be decided by uncertainties in outside markets, including the dollar's trend, whether the Chicago Board of Trade soy contracts can break through $10.68-a-bushel resistance and the carryout of local soy reserve policy, said analysts.

 

CBOT January soy ended 7 1/2 cents higher at $10.60 1/2 overnight.

 

Trading volume of all soy contracts declined to 956,684 lots from 1,503,122 lots Monday.

 

Open interest fell 28,796 lots to 475,452 lots Tuesday.

 

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

 

Tuesday'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   Change     Volume

                     Price

Soy         Sep 2010      4,028   Down  2       956,684

Corn       May 2010      1,787     Up  6       108,196

Soymeal  Sep 2010      3,020     Up 23     2,512,596

Palm Oil  Sep 2010      6,736     Up  8       218,778

Soyoil     Sep 2010      7,794   Down  4       761,378