Thursday: China soy futures drift lower; funds extend liquidation

 

 

Soy futures fell on the Dalian Commodity Exchange Thursday, extending losses as funds took profit ahead of the eight-day national celebrations starting Oct. 1.

 

The benchmark May 2010 soy contract settled 1.8% lower at RMB3,636 a metric tonne.

 

"There has been a large wave of funds exiting the market as they close out positions ahead of the holidays," said Xu Wenjie, an analyst with Tianma Futures.

 

"That's the primary reason for weakness in the agricultural complex, since even though Chicago soy is down, it's not that weak," he said.

 

Soy futures at the Chicago Board of Trade ended lower Wednesday, falling on more favorable weather for U.S. Midwest crops.

 

Weakness in crude oil and gold futures brought external weakness to the complex.

 

Soy's defensive posture reflects broader weakness in the commodity complex, with ample supply further weighing on the market.

 

Base metals on the Shanghai Futures Exchange inched lower Thursday, tracking the London Metal Exchange and a slightly stronger dollar.

 

Corn, soymeal, palm oil and soyoil futures posted declines Thursday.

 

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

 

Product    Contract     Settlement  Price  Change     Volume

 

Soy         May 2010      3,636        Dn    65          500,944

Corn        May 2010      1,728        Dn     9          129,292

Soymeal  May 2010      2,714        Dn    40          926,144

Palm Oil   May 2010      5,820        Dn    84          429,652

Soyoil      May 2010      6,890        Dn   104         576,632