Monday: China soy futures settle higher on new funds inflow

 

 

Soy futures traded on the Dalian Commodity Exchange settled higher Monday following a fresh inflow of funds to the market in anticipation of favorable government policy.

 

The benchmark September 2010 soy contract settled RMB16 a metric tonne higher at RMB3,690/tonne.

 

The contract opened lower but edged higher during the session, with strong support at RMB3,630/tonne, the 60-day average, said Tianqi Futures in a note.

 

As the government hasn't announced a detailed soy purchase plan yet while the market widely expects the base purchase price to be higher than last year's roughly RMB3,750/tonne, there isn't much room for futures to fall below that level, said a trader with a foreign trading house.

 

Meanwhile, analysts said the U.S. dollar is likely to maintain its weakening trend despite a rebound Friday,  helping to support commodities.

 

With speculation on weather during the U.S. soy harvest season dwindling, the focus is shifting to U.S. supply and Chinese demand, said Tianqi, expecting China's soy imports in November to be around 3.76 million tonnes.

 

Trading volume for all soy contracts rose to 220,574 lots from 100,416 lots Friday.

 

Open interest rose 10,932 lots to 275,306 lots.

 

Corn futures settled little changed, while soymeal futures, palm oil futures and soyoil futures all settled lower.

 

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

 

Contract    Settlement    Price        Change     Volume

Soy          Sep 2010      3,690        Up   16    220,574

Corn         May 2010      1,737        Dn    1     56,940

Soymeal    May 2010      2,808       Dn   10  1,162,670

Palm Oil    May 2010      6,032        Dn   80    161,928

Soyoil       May 2010       7,180       Dn   76    749,518