Monday: China soy futures down; traders cautious amid uncertainty

China's soy futures traded on the Dalian Commodity Exchange settled slightly lower Monday, with traders cautious as they weighed conflicting signals.

 

The benchmark September 2010 soy contract settled 0.2% lower at RMB3,945 a metric tonne.

 

Soy futures traded at the Chicago Board of Trade will likely consolidate ahead of the year end due to a lack of bullish factors and with the dollar's upward rebound likely to continue, analysts said. A strengthening dollar is generally bearish for commodities denominated in the U.S. currency as it makes them relatively pricey for buyers using other currencies.

 

"DCE soy still have downward room as cash supply is sufficient, and are likely to test the supportive level of RMB3,850-RMB3,900/tonne by the end of this month," said Hu Shengming, an analyst with Tianqi Futures.

 

The benchmark contract was trading within a tight range of RMB3,925-RMB3.967/tonne Monday.

 

Trading volume of all soy contracts declined to 389,776 lots from 532,796 lots Friday.

 

Open interest fell by 10,874 lots to 388,248 lots Monday.

 

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

 

Traditionally bullish vegetable oil demand ahead of the Chinese New Year--to be celebrated in mid-February--versus ample oilseed supply in the crop year that began Oct 1. will likely to make edible oil's consolidation more volatile, said Galaxy Futures in a note.

 

Monday'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      3,945        Dn     9     389,776

Corn       Sep 2010      1,864        Unch         39,198

Soymea l Sep 2010      2,961        Up     7   1,311,514

Palm Oil  Sep 2010      6,900        Dn    50     525,654

Soyoil     Sep 2010      7,766        Dn    28     951,620