Wednesday: China soy futures settle down; sollar rebound, oil decline

 

 

China's soy futures traded on the Dalian Commodity Exchange settled lower Wednesday, as a dollar rebound and lower overnight crude oil prices weighed.

 

The benchmark September 2010 soy contract settled 1.0% lower at RMB4,070 a metric tonne.

 

Based on the government's cash soy purchase price of RMB3,740/tonne and a subsidy of RMB160/tonne,arbitrage will stay open at prices between RMB4,040-RMB4,200/tonne, said Gao Yunyue, an analyst with Zhejiang Dadi Futures Brokerage.

 

The RMB4,100/tonne level seems to be presenting a top, as futures prices rose above that level Tuesday, but quickly lost upward momentum. But there isn't much room for prices to fall below RMB4,000/tonne either, leaving prices to consolidate between RMB3,950 and RMB4,200/tonne, Gao said.

 

Trading volume of all soy contracts declined to 835,950 lots from 1,201,002 lots Tuesday.

 

Open interest rose by 4,560 lots to 460,682 lots Wednesday.

 

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

 

Cash corn prices have been rising due to snowfall in northeastern producing areas, helping corn futures to buck the downward trend Wednesday, said Wang Cheng, an analyst with Nanhua Futures Co.

 

A two-month low for crude oil prices overnight dragged on vegetable oil futures, the prices of which had been on the rise in recent trading.

 

Following are Wednesday'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      4,070        Dn    39       835,950

Corn       Sep 2010      1,856        Up     4        177,138

Soymeal  Sep 2010      2,999        Dn    61     1,914,652

Palm Oil  Sep 2010      6,940        Dn    146     445,754

Soyoil     Sep 2010      7,988        Dn    136    1,406,454