June 1, 2011

Soy futures on the Dalian Commodity Exchange rose marginally Tuesday (May 31) on dip buying and signs of slight improvement in the outlook for soy demand, despite mild losses across most of the complex due to supply concerns.

The most actively traded January soy contract gained RMB3 (US$0.15) to settle at RMB4,458 (US$688)/tonne.

"Soy demand has been steadying due to the feedmeal companies replenishing for the rising hog population, even if supply pressures from (large) inventories haven't completely eased," the China National Grain and Oils Information Centre (CNGOIC) said.

Margins are also beginning to recover for soy processing companies, the CNGOIC said. Still, supply pressures are likely to limit momentum in the soy complex.

The Ministry of Commerce said Tuesday that China's soy imports in May could reach 5.43 million tonnes, the highest level this year, 40% higher than in April and up 24% from a year earlier.

Adding to the weight on the market, China plans to sell 2.12 million tonnes of reserve soy in June at below-market prices to keep domestic edible oil prices stable.

US futures markets were closed Monday in observance of the Memorial Day holiday. The Chicago Board of Trade saw mixed trading during Asian hours Tuesday, with soy up marginally and corn slightly lower.