December 10, 2008

China's benchmark soy futures traded on the Dalian Commodity Exchange pared gains as traders took yesterday's rise as an opportunity to sell and exit the market.

 

The May 2009 contract edged lower in the afternoon trade to settle RMB16 higher at RMB2,968/tonne, or 0.5 percent, after opening 2 percent up tracking gains made overnight by counterparts in Chicago. Most other contracts were lower.

 

"The market is showing a lack of confidence, and the lower open interest showed that traders were exiting the market," said Shi Yan, an analyst at China International Futures Co.

 

Open interest in all soy contracts fell 20,166 lots to 585,880 lots Tuesday.

 

Market expectations that Beijing will announce more measures to give stimulus to the economy during the ongoing 3-day Central Economic Work Conference that began Monday boosted markets from commodities to stocks Monday. The rise gave an opportunity to many traders to cash in, said analysts.

 

Most metals futures were lower Tuesday, while the benchmark Shanghai composite stock index ended 2.5 percent lower at 2,037.74.

 

"The market has digested (the conference's possible impact), and is back to sense," said Lv Qinghai, an analyst at Tianqi Futures, adding the market is likely to be range bound in a wide range in the near term.

 

Trading volume declined to 1,276,036 lots from 1,520,458 lots Monday.

 

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