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December 10, 2008

                
China benchmark soy pares gains as traders cash in on rise
                    


China's benchmark soy futures traded on the Dalian Commodity Exchange pared gains as traders took yesterday's rise as an opportunity to sell and exit the market.

 

The May 2009 contract edged lower in the afternoon trade to settle RMB16 higher at RMB2,968/tonne, or 0.5 percent, after opening 2 percent up tracking gains made overnight by counterparts in Chicago. Most other contracts were lower.

 

"The market is showing a lack of confidence, and the lower open interest showed that traders were exiting the market," said Shi Yan, an analyst at China International Futures Co.

 

Open interest in all soy contracts fell 20,166 lots to 585,880 lots Tuesday.

 

Market expectations that Beijing will announce more measures to give stimulus to the economy during the ongoing 3-day Central Economic Work Conference that began Monday boosted markets from commodities to stocks Monday. The rise gave an opportunity to many traders to cash in, said analysts.

 

Most metals futures were lower Tuesday, while the benchmark Shanghai composite stock index ended 2.5 percent lower at 2,037.74.

 

"The market has digested (the conference's possible impact), and is back to sense," said Lv Qinghai, an analyst at Tianqi Futures, adding the market is likely to be range bound in a wide range in the near term.

 

Trading volume declined to 1,276,036 lots from 1,520,458 lots Monday.

 

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

                                   

Tuesday's settlement prices in renminbi a tonne for benchmark contracts and volume for all contracts in lots (One lot is equivalent to 10 tonnes):
 
 
Contract
Settlement
Price Change
Volume
Soy
May-09
2,968
Up 16
1,276,036
Corn
May-09
1,479
Up 1
247,410
Soymeal
May-09
2,157
Down 16
449,384
Palm oil
May-09
4,622
Up 10
89,096
Soyoil
May-09
5,714
Down 34
412,144
         

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