January 7, 2008

 

Monday: China soybean futures settle down on concerns of rising supply

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Monday on concerns of a high volume of imports.

 

The benchmark September 2008 soybean contract settled RMB59 lower at RMB4,738 a metric tonne.

 

China's soybean imports in the past two months have been rising, but demand for soymeal wasn't strong, said Huang Xiao, a manager at Capital Futures.

 

China is expected to have imported around 3 million metric tonnes of soybeans in December, according to data from Shanghai JCI, a grain consultancy firm.

 

Concerns for the government's price control measures plagued the market as well.

 

Local media reported Friday that the National Development and Reform Commission ordered sellers of grains, edible oil, meat, eggs and other food items to report to local price regulators for one-off price hikes of more than 5% or increases of more than 8% within 10 days.

 

If they are caught for failing to report price increases, they must reduce the extent of the increase or revert to original prices, it said.

 

The government is deeply concerned about the surge in soybean prices.

 

Major industry participants, including Heilongjiang Jiusan Oil and Fat Co. and grain trader COFCO, attended a meeting Friday to discuss China's soybean industry development.

 

According to draft policy suggestions prepared by China National Grain and Oils Information Center that were discussed at the meeting, China should increase subsidies to soybean growers and encourage domestic soybean processing, meeting participants said.

 

Palm oil futures settled higher on rising cash prices due to falling stocks, while soyoil futures settled mixed. Soymeal futures settled lower but corn futures settled slightly higher.

 

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

 

              Contract      Settlement Price  Change     Volume

Soybean  Sep 2008      4,738         Dn    59           819,614

Corn        May 2008      1,694        Up      1           420,146

Soymeal  Sep 2008      3,417         Dn    44           449,988

Palm Oil   May 2008      9,474         Up    20           27,874

Soyoil      May 2008     10,470        Up     28          143,832