December 25, 2008

Thursday: China soy futures settle up on CBOT gains; to extend gains

China's soybean futures traded on the Dalian Commodity Exchange settled higher Thursday, tracking overnight gains on the Chicago Board of Trade.


The benchmark May 2009 soybean contract settled RMB52 higher at RMB3,287/tonne, or up 1.6%.


Processing plants resumed operations last week because it became profitable after soyoil and soymeal cash prices stabilized recently, analysts said.


Farmers are more willing to sell becaue the amount of soybeans purchased by the state isn't enough to absorb excess supply.


Long position holders were cashing in after recent price gains, while short position holders were covering their positions to exit the market, said Qi Zhiyun, a manager at Tianqi Futures.


Open interest in all soybean contracts fell 10,620 lots to 454,736 lots Thursday.


The National Development and Reform Commission said in a statement Thursday that the governmnet will strengthen its monitoring of major commodities prices during the coming holidays, including the Chinese New Year, and will keep prices stable.


"I feel there is little possibility that commodities prices will fall further," said Dong Shuangwei, an analyst at Capital Futures.


Trading volume rose to 690,434 lots from 641,266 lots Wednesday.


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


Although the government confirmed it will buy a third batch of corn from the market comprising 20 million tonnes, corn prices only rose slightly as traders expect demand for corn to remain sluggish.


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


Contract        Settlement        Price        Change      Volume

Soybean        May 2009         3,287        Up   52      690,434

Corn             May 2009         1,527         Up    3      230,704

Soymeal        May 2009         2,338         Up   16     326,336

Palm Oil         May 2009         5,048         Up  172    190,916

Soyoil            May 2009         6,080         Up  116    552,280

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