August 12, 2009

China's soy futures traded on the Dalian Commodity Exchange settled higher Wednesday, but gave back most of their earlier gains ahead of the U.S. Department of Agriculture's report due tonight.

 

The benchmark May 2010 soy contract settled RMB76 higher at RMB3,846 a metric tonne, up 2.0%.

 

High liquidity has boosted the recent rise in commodities, from agricultural products to industrial products.

 

Compared with industrial products, the prices of agricultural products are still too low, "giving hot money an excuse to flow in," said Huang Xiao, a manager at Capital Futures.

 

However, soy contract gave back most of its earlier gains towards close, as traders wanted to avoid risks before the USDA report.

 

The USDA is scheduled to release its first 2009 crop production estimates based on field surveys and its monthly supply and demand estimates Wednesday at 8:30 a.m. EDT (1230 GMT).

 

The average of trade estimates by analysts surveyed by Dow Jones pegged 2008-09 U.S. soy ending stocks at 106 million bushels, versus the previous month's estimate of 110 million bushels.

 

The trading volume of all soy contracts rose to 462,954 lots from 349,190 lots Tuesday.

 

The open interest rose 8,930 lots to 267,738 lots Wednesday.

 

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

 

Wednesday's settlement prices in yuan a tonne for benchmark contracts and volume for all contracts in lots (one lot is equivalent to 10 tonnes):

                  
Contract     Settlement     Price      Change       Volume

Soy            May 2010      3,846      Up   76       462,954

Corn           May 2010      1,670      Unch            78,880

Soymeal     May 2010      3,006      Up   40     2,267,544

Palm Oil      May 2010      6,688      Up  100    1,066,788

Soyoil         May 2010      7,758      Up  150    1,304,424