Wednesday: China soy futures settle down on CBOT fall; test support

 

 

China's soy futures traded on the Dalian Commodity Exchange settled lower Wednesday, after Chicago Board of Trade counterparts fell below the US$10-a-bushel support level overnight.

 

The benchmark September 2010 soy contract settled RMB22, or 0.6%, lower at RMB3,929 a metric tonne.

 

The contract opened lower, weighed down by CBOT soy, which set another low for the current downtrend, dropping to five-week lows Tuesday.

 

CBOT January soy ended 10 cents lower at US$9.91 overnight.

 

The DCE contract tested levels around RMB3,900/tonne, a near-term support according to analysts, and panic-stricken traders began reducing positions during the session.

 

But strong local soy cash prices helped support futures above RMB3,900/tonne, since crushing profits remained strong, said an analyst with a foreign trading house.

 

But other analysts said a possible further fall on CBOT may plague DCE, especially when expected output increases in South America weigh on the market.

 

The trading volume of all soy contracts declined to 402,744 lots from 457,414 lots Tuesday.

 

Open interest fell 13,252 lots to 369,890 lots Wednesday.

 

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

 

Wednesday's settlement prices in yuan a tonne for benchmark contracts and volume for all contracts in lots (one lot is equivalent to 10 tonnes):

 

Product  Contract  Settlement Price  Change     Volume

 

Soy         Sep 2010      3,929        Dn   22    402,744

Corn       Sep 2010      1,850        Dn    9     87,596

Soymeal  Sep 2010      2,942        Dn   14  1,507,142

Palm Oil  Sep 2010      6,774        Dn   64    490,900

Soyoil     Sep 2010      7,658        Dn   66  1,005,440