January 9, 2008

 

Wednesday: China soybean futures settle mixed; price-curb fears remain

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mixed Wednesday, with market players still concerned the government may take more measures to curb rising soybean prices.

 

The benchmark September 2008 soybean contract settled unchanged at RMB4,730 a metric tonne.

 

Soybean prices in China have risen more than 70% to above RMB4,300/tonne this week from around RMB2,500/tonne during the same period last year due to a fall in output following a drought and rising global crude oil prices.

 

To keep prices under control, the government has already lowered import tariffs, and a person familiar with the situation said China plans to buy more soybeans from overseas.

 

Domestic soybean prices are unlikely to fluctuate ahead of the Lunar New Year holiday in early February, as most processing plants have already stocked up for the holiday and won't be in any hurry to buy, said Lv Chaowen, chief of the rural area department in the Heilongjiang provincial grain administration.

 

However, Nanhua Futures Co. analyst Li Honglei said rising import costs will continue to support soybean prices.

 

Chicago Board of Trade soybean futures finished solidly higher overnight, with the July contract rallying to a new all-time high amid commodity fund buying and spillover support from firmer markets elsewhere.

 

Palm oil futures, soyoil futures and soymeal futures settled higher, while corn futures settled mixed.

 

The market has digested the news that China will import 73,000 tonnes of soyoil to meet domestic demand. Analysts said the volume is too little to rein in prices.

 

Speculation over a likely cut in India's palm oil import duties has been supporting palm oil prices.

 

Wednesday'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      4,730      Unchanged         798,244

Corn         Sep 2008      1,836         Dn     1           338,776

Soymeal    Sep 2008      3,450         Up    18          825,290

Palm Oil     May 2008      9,510        Up     62          24,182

Soyoil        May 2008     10,490        Up    72          140,284