December 18, 2008
China's soy futures traded on the Dalian Commodity Exchange settled lower Thursday, following crude oil prices.
The benchmark May 2009 soy contract settled RMB28 lower at RMB3,047 a tonne, or down 0.9 percent.
Crude oil futures sank below US$40 a barrel Thursday in Asia on expectations that demand will continue to decline and prices will remain weak, despite the Organization of Petroleum Exporting Countries' biggest-ever production cut.
OPEC announced Wednesday it was reining in output by a record 2.2 million barrels a day from Jan 1, largely in line with market expectations.
Activity in soy futures Thursday was dominated by funds' short-term trading, showing a lack of confidence, said Tang Shaoming, an analyst at Tianqi Futures.
Open interest in all soy contracts fell 5,120 lots to 485,906 lots Thursday.
Trading volume declined to 327,700 lots from 448,178 lots Wednesday.
Corn futures settled slightly higher while soymeal futures were mostly little changed.
Palm oil futures and soyoil futures settled lower.
Rumors that the government is considering purchases of another 5 million tonnes of corn to support prices, beyond the 10 million tonnes announced earlier, failed to have much impact on the market.
"The capacity for state reserves is limited, and the earlier purchases are still going slowly," said Huang Xiao, an analyst at Capital Futures.
As of Dec 5, the government had bought 2.96 million tonnes of corn, or 30 percent of the planned purchase amount.
Meanwhile, a bird flu virus was found in some poultry in Jiangsu province earlier this week, raising concerns about demand for feedmeal, which could also affect demand for corn, said Tang.
Thursday's settlement prices in yuan a tonne for benchmark contracts and volume for all contracts in lots (One lot is equivalent to 10 tonnes):
Contract settlement Price Change Volume
Soybean May 2009 3,047 Dn 28 327,700
Corn May 2009 1,483 Up 4 519,844
Soymeal May 2009 2,300 Up 1 627,972
Palm Oil May 2009 4,658 Dn 112 66,742