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December 23, 2008

 
China corn futures settle up as government expected to buy more
   
  

China's corn and soy futures traded on the Dalian Commodity Exchange settled sharply higher Monday (December 22), aided by expectations the government will buy more corn from the market.


The rise in outside markets such as crude and metals also helped the sentiment.


The benchmark May 2009 soy contract settled RMB121 higher, or up 4.0 percent, at RMB3,184 a tonne.


Industry participants expect the government to buy another 20 million tonnes of corn from major producing areas to support sluggish domestic prices.


"Government policy is quite clear in supporting prices, it’s just a matter of when and how much," said an analyst with Chicorn Network.


The commodities market's panic was eased after the US government approved a bailout plan for automakers, said Xu Wenjie, an analyst at Tianma Futures Co.


The global financial crisis has caused panic selling in commodities from agricultural products to metals as funds exit the market.


Lower global commodity prices and a year-end demand ahead of holidays have helped improve local import volumes.


Soy, edible oil and corn imports in November were all higher versus October, according to customs data released Monday.


China's November soy imports were higher at 3.32 million tonnes versus 2.13 million tonnes in October, though they fell 1.1 percent on year.


The open interest in all soy contracts fell by 5,216 lots to 461,872 lots Monday.
  

The trading volume jumped to 941,714 lots from 358,798 lots Friday.


Corn, soy meal futures, palm oil and soy oil futures all settled higher.


The outlook for a weaker corn demand after the holidays helped curb the rise in corn prices.


Monday'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

Soy

May 2009

3,184

Up 121

941,714

Corn

May 2009

1,511

Up 36

583,976

Soymeal

May 2009

2,318

Up 64

1,075,946

Palm oil

May 2009

4,862

Up 188

94,460

Soyoil

May 2009

5,956

Up 288

392,056

   

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