December 30, 2011
Weather concerns in South America pushed soy futures slightly higher on the Dalian Commodity Exchange on Thursday (Dec 29), but edible oil contracts fell due to weaker domestic demand.
The most actively traded September soy contract settled 0.2% higher at RMB4,344 (US$685)/tonne.
Dalian investors took cues from the Chicago Board of Trade, where concerns about the effects of hot, dry weather in South America, especially on corn in Argentina and southern Brazil, pushed prices to six-week highs this week.
The weather, which is threatening corn crops as they enter a crucial pollination phase, is dominating market sentiment, traders said.
Dalian corn and soymeal tracked soy's rise, which was aided by firmer domestic equity markets and market speculation that the central bank may move soon to further loosen banks' reserve requirements.
However, edible oils broke with the trend due to reports of sluggish year-end restocking.
"Since September, edible oil prices have fallen sharply and medium-to-smaller traders have incurred broad-based losses, negatively affecting restocking demand," the state-backed China National Grain and Oils Information Centre (CNGOIC) said in a report Thursday.
Bulk edible-oil sales have remained sluggish, despite a recent mild rebound in prices, said the CNGOIC, an influential agriculture research agency.
Palm oil fell 0.1%, while soyoil lost RMB4 (US$0.63).