June 15, 2011


Tuesday: China soy futures marginally up amid soyoil rebound


Soy futures on the Dalian Commodity Exchange closed marginally higher Tuesday (Jun 14) in thin trade, led by a mild technical rebound in soyoil and palm oil.


The benchmark January soy contract settled 0.1% higher at RMB4,463 (US$689)/tonne. Trade volume fell for the seventh consecutive day to 59,878 lots, the lowest since February 1, as many investors stayed on the sidelines awaiting economic data.


China's May consumer price index, which reached a 34-month high at 5.5%, was in line with market expectations, analysts said.


Shortly after the securities and futures exchanges closed for the day, China's central bank surprised the market, announcing it would raise banks' reserve requirement ratio by 0.5 percentage point, the sixth such hike this year, in a move to address inflation concerns by locking up liquidity in the banking system. The increase takes effect June 20.


"Edible oils and soy will face huge downside pressure in the near term," experts said.


An auction of 300,000 tonnes of soy from state reserves Tuesday attracted no bids, reflecting persistent weak demand.


Only 11,000 tonnes of soy, or 0.3% of the amount the central government offered, have been sold in 13 bi-weekly auctions since it began such sales last December, according to reports.

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