Chinese Exchange to cut margin on grain

China's Dalian Commodity Exchange plans to lower margin requirements for trading of major grain futures contracts to 5 percent from 7 percent, with effect from next week to help boost trade in these contracts. Daily trading limits for soy, corn, soymeal, soyoilcontracts as well as palmoil will also be trimmed to 4 percent from 5 percent as from April 9, the exchange said.
Margins for coke futures will be lowered to 6 percent from 7 percent while daily trading limits will be cut to 4 percent from 5 percent. The margin reduction on coke futures trading follows the exchange's September 2011 move to increase liquidity to attract more steel mills. "Price movement of Dalian contracts, like soy and corn, is small as compared with soft commodities and offers little chance for speculation. The reduction, as I understand, is trying to activate trading of these contracts," said Li Dongji, a researcher with Guotai Junan Futures. Li referred to cotton and white sugar traded at Zhengzhou Commodity Exchange.