January 11, 2012

Soy futures on the Dalian Commodity Exchange on Tuesday (Jan 10) rose to a two-month high, tracking a sharp rise on the Chicago Board of Trade Monday.

The most actively traded September soy contract settled 0.6% higher at RMB4,374 (US$693)/tonne. The January CBOT soy contract closed 3% higher Monday.

Traders said they expect the USDA to trim its forecast for 2011 soy output in Brazil and Argentina in its January crop report on Thursday, because hot, dry weather is hurting crops in the region.

Meanwhile, indications that Beijing will support stock markets also buoyed market sentiment.

Guo Shuqing, chairman of the China Securities Regulatory Commission, said China would open its capital markets further to foreign investors and seek a greater role for long-term institutional investors.

The benchmark Shanghai Composite Index rose 2.7% Tuesday, bringing its gain over the last three sessions to 6.4%.

China's soy imports fell 3.9% in 2011 to 52.64 million tonnes, marking the first decline since 2004, data from the General Administration of Customs showed Tuesday.

The government's massive sales of oilseeds and edible oils from reserves last year, part of efforts to control inflation, damped demand for imported soy.