January 15, 2009
Thursday: China soy futures settle down; volume thins; rebound ends
Soybean futures traded on the Dalian Commodity Exchange settled lower in thin trading volume Thursday, with analysts expecting prices to consolidate amid high volatility in coming sessions.
The benchmark September 2009 soybean contract settled RMB39 lower at RMB3,395/tonne, down 1.1%.
Market participants have already factored in supportive fundamental news, such as the government's purchase of domestic soybeans to shore up local producers, and prices may lack upward momentum after the latest rebound, analysts said.
"The recent rebound is almost over - and (soybean) prices will likely consolidate before the Chinese New Year break kicks off," said Gao Yanrong, an analyst with Dalu Futures.
Gao put nearby support for September soybeans at around RMB3,200/tonne, and tipped nearby resistance at around RMB3,500/tonne.
Market participants will continue to watch Argentina's weather, analysts said. Argentina is the world's third-largest soybean producer and exporter behind the U.S. and Brazil.
Trading volume of all soybean contracts declined to 517,034 lots from 632,404 lots Wednesday.
Opening interest fell by 560 lots to 359,886 lots Thursday.
Corn, soymeal, soyoil and palm oil futures all settled lower.
Soyoil futures traded sideways, eventually losing 1.5%, or RMB96, to settle at RMB6,234/tonne.
Given that Chinese New Year is traditionally a high-consumption season for soyoil, cash prices will likely be on firmer ground in coming weeks, Gao said.
Thursday's settlement prices in yuan a metric tonne for benchmark contracts and the volume for all contracts in lots (One lot is equivalent to 10 tonnes):
Contract Settlement Price Change Volume
Soybean Sep 2009 3,395 Dn 39 517,034
Corn May 2009 1,550 Dn 3 77,990
Soymeal May 2009 2,623 Dn 20 405,620
Palm Oil May 2009 5,250 Dn 120 120,230
Soyoil May 2009 6,234 Dn 96 242,152
