January 8, 2008
Tuesday: China soybean futures settle mostly down on government import plan
Soybean futures traded on the Dalian Commodity Exchange settled mostly lower Tuesday on news that the government will import soybeans to meet domestic demand.
The benchmark September 2008 soybean contract settled RMB8 lower at RMB4,730 a metric tonne.
China plans to import 1.1 million tonnes of soybeans and 73,000 tonnes of soyoil to curb rising domestic prices, a person familiar with the situation said Tuesday.
This is the latest move by the government to control inflation, which hit an 11-year high of 6.9% in November, driven by food inflation of 18.2%.
The person said the imported soybeans and soyoil will be released to the market during the Lunar New Year holiday in early February and the National People's Congress and Chinese People's Political Consultative Conference meetings in early March.
Analysts said the move is likely to have some psychological impact on the market but will only slow the rise in soybean and soyoil prices, as demand is stronger than supply.
"The imports are unlikely to reverse the rising trend of soybean and soyoil prices, as the domestic market can totally digest (these amounts)," said Liu Xinghua, an analyst at Great Wall Futures Co.
China imported 27.89 million tonnes of soybeans from January to November, up 8.1% from a year earlier.
But analysts said soybean futures on the Chicago Board of Trade are likely to end their short-term downward correction later Tuesday.
Palm oil futures and soyoil futures settled mostly lower on the news, while soymeal futures and corn futures settled mostly higher.
Tuesday's settlement prices in yuan a metric tonne and the volume for all contracts in lots (One lot is equivalent to 10 tonnes):
Contract Settlement Price Change Volume
Soybeans Sep 2008 4,730 Dn 8 834,876
Corn May 2008 1,700 Up 6 487,118
Soymeal Sep 2008 3,432 Up 15 878,294
Palm Oil May 2008 9,448 Dn 26 31,112
Soyoil May 2008 10,418 Dn 52 156,778
