June 15, 2009
Monday: China soy futures drag on lower commodities, cool weather
Soy futures fell Monday on the Dalian Commodity Exchange, tracking a retreat in the commodities complex, as rainy weather at home and abroad also brought supply pressure on agricultural product prices.
The benchmark January 2010 soy contract fell 1.6% to settle at RMB3,650 a metric tonne.
Rain in crop areas of northern China last week eased drought-like conditions, and a cooler pattern through this week favors corn and soy, following earlier dryness and hot temperatures, the agricultural news portal DTN said.
Fears of weakening demand, along with weather-driven supply pressures, produced a knock-on effect on prices from Chicago through to Dalian.
"June through September is traditionally a period of weaker demand for soy, as it is for most commodities," said Li Honglei of Nanhua Futures.
Soy futures on the Chicago Board of Trade fell Friday, as traders took profits going into the weekend amid concerns about slowing demand from China.
"We are seeing soy import cancellations for 2008/09 foreign purchases, some from unknown and some from China," AgriCharts said in a note late Friday. "Some of those cancellations can be attributed to the higher July soy prices but also a sharp drop of 15% in feed meal use during May in China."
A stronger dollar also sent most commodities into retreat Monday, with copper falling to its lower limit on the Shanghai Futures Exchange.
But in the case of soy, weakening demand played more of a role in dragging prices than the U.S. currency's gains, Li said.
Corn, soymeal, palm oil and soyoil futures settled between 1% and 2.9% lower Monday.
Monday'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 Jan 2010 3,650 Dn 60 321,028
Corn Jan 2010 1,617 Dn 17 180,218
Soymeal Jan 2010 2,906 Dn 41 2,363,742
Palm Oil Jan 2010 6,232 Dn 184 369,978
Soyoil Jan 2010 7,536 Dn 158 901,832
