Thursday: China soy futures settle down amid liquidity concerns

 

 

Soy futures on the Dalian Commodity Exchange settled lower Thursday as traders took profits amid concern over possible tightening of money supply.

 

The benchmark September 2010 soy contract settled RMB28 a metric tonne lower at RMB3,988/tonne.

 

The contract opened lower, reacting to a fall on the Chicago Board of Trade overnight.

 

Local media reported that China's central economic working conference will be held this weekend, and the market is concerned the government may tighten liquidity amid inflation expectations.

 

"Speculative money has pushed soy prices higher due to the government's purchasing policy, but there was profit taking in the face of the policy risks," said an analyst with COFCO Ltd.

 

The market is focusing on the U.S. Department of Agriculture's monthly supply and demand report due later Thursday, which is expected to raise estimates for soy demand, said analysts.

 

Trading volume for all soy contracts fell to 846,626 lots from 850,838 lots Wednesday.

 

Open interest fell to 457,658 lots from 482,918 lots.

 

Soymeal and soyoil futures settled also settled lower, while corn and palm oil futures settled mixed.

 

Thursday'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      3,988        Dn   28      846,626

Corn        May 2010      1,785        Dn    1      137,928

Soymeal  Sep 2010      3,006        Dn   14     1,581,878

Palm Oil   Sep 2010      6,822        Up   22      393,772

Soyoil      Sep 2010      7,818        Dn   12      927,986