Friday: China soy futures up on forecast for favorable USDA report

 

 

China's soy futures traded on the Dalian Commodity Exchange settled higher Friday due to expectations that U.S. Department of Agriculture supply-and-demand reports next week will show a bullish decline in soy stocks.

 

The benchmark September 2010 soy contract settled up RMB35, or 0.9%, at RMB3,777 a metric tonne.

 

After opening lower, the contract rose into positive territory and consolidated around the highs.

 

The USDA is expected to report Tuesday a drop in soy ending stock levels. U.S. soy traded on the Chicago Board of Trade have already staged a rebound as a result, despite widespread weakness in metals and energy markets.

 

However, investors should watch cautiously to see whether the rebound can be sustained after the report comes out, Galaxy Futures said in a note.

 

Funds are likely to cash out of the market next week ahead of the Lunar New Year holidays, but global demand for vegetable oils is expected to be strong and China's policies in support of agricultural products are also positive for futures prices.

 

Trading volume of all soy contracts rose to 555,946 lots from 259,240 lots Thursday.

 

Open interest rose 11,826 lots to 369,450 lots Friday.

 

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

 

Following are Friday's settlement prices in yuan a metric tonne for benchmark contracts and volume for all contracts in lots (One lot is equivalent to 10 tonnes):

 

              Contract  Settlement Price  Change     Volume

Soy        Sep 2010      3,777        Up   35    555,946

Corn       Sep 2010      1,847        Dn    2     41,754

Soymeal  Sep 2010      2,724        Up   12    977,530

Palm Oil  Sep 2010      6,662        Up   14    533,564

Soyoil     Sep 2010      7,268        Up   18    663,138