Tuesday: China soy futures settle up; touch new 2009 high on CBOT

 

 

China's soy futures traded on the Dalian Commodity Exchange settled higher Tuesday, touching a fresh 2009 high during the session, supported by overnight gains at the Chicago Board of Trade.

 

The benchmark September 2010 soy contract settled 0.6% higher at RMB4,109 a metric tonne.

 

Speculative funds pushed soy prices to as high as RMB4,130/tonne, as the government's soy purchase policy, inflation expectations and a U.S. Department of Agriculture report to be released Thursday all gave buyers good reasons to set up long positions.

 

However, analysts said momentum was lost after the benchmark contract broke through RMB4,100/tonne, and a downward correction may be imminent.

 

The USDA will release its December supply and demand report Thursday at 8:30 am EST. The average estimate of analysts surveyed by Dow Jones Newswires puts 2009-10 ending stocks at 235 million bushels compared with the November forecast of 270 million bushels. The relatively strong performance of U.S. soy amid a weak overall commodities market means the soy market has digested the possible draw, while favorable South American weather heralds a recovery in soy output there, said Galaxy Futures in its note.

 

Ample Chinese soy imports in December and January will also likely weigh on local prices, limiting any near-term rise, Tianqi Futures said in a note.

 

December imports will likely be 3.87 million tonnes compared with less than 3 million tonnes in each of the past three months, according to the latest Ministry of Commerce report.

 

Trading volume of all soy contracts declined to 1,201,002 lots from 1,229,530 lots Monday.

 

Open interest rose 14,764 lots to 456,122 lots Tuesday.

 

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

 

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      4,109        Up     24       1,201,002

Corn        May 2010      1,788        Up     2        101,072

Soymeal  Sep 2010      3,060        Dn     7        1,464,976

Palm Oil   Sep 2010      7,086        Dn     18      420,614

Soyoil      Sep 2010      8,124        Dn      8      1,446,686