January 9, 2009

Soybean futures settled higher Friday on the Dalian Commodity Exchange, tracking Chicago's bounce as traders were reassured on firmer demand based on dry weather in South America.

 

The benchmark September 2009 soybean contract gained 3% to settle at RMB3,384 a metric tonne.

 

The U.S. is the world's reserve for soybean supplies until South American production comes online in the spring, said an analyst.

 

Soy prices were also led higher on steadier crude oil, providing a cue for Chinese futures.

 

"There isn't a domestic cue today. Dalian is just reflecting the 24-cent soybean gain on the Chicago Board of Trade's electronic bourse," said Wang Shaoguang of Galaxy Futures.

 

Four major U.S. Department of Agriculture reports are expected Monday: Crop Production, World Agricultural Supply and Demand Estimates, Winter Wheat Seedings and Quarterly Stocks of Grains.

 

J.P. Morgan tipped the reports to produce "small downward revisions to U.S. corn and soybean production; these are unlikely to change market tone."

 

Chicago soybean futures had weakened Thursday, paring earlier gains on late profit-taking as traders pulled back in the face of market uncertainty.

 

Corn, soymeal and vegetable futures all posted gains on Dalian Friday.

 

Chinese soymeal prices were sharply buoyed by declining stocks, as a spate of short-covering earlier had drawn down supplies, said Xu Wenjie of Tianma Futures.

 

Prices for vegetable oils and soymeal are expected to stabilize as demand peaks toward the Lunar New Year in late January, said analysts.

 

Cash domestic soybean prices in Heilongjiang, a major producing province, were slightly higher from last week.

 

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

 

Contract        Settlement       Price       Change      Volume

Soybean        Sep 2009        3,384       Up  98       967,462

Corn             May 2009        1,558       Up  18       242,074

Soymeal       May 2009         2,676       Up  104     551,746

Palm Oil        May 2009         5,496       Up  122     185,330

Soyoil           May 2009         6,456       Up  100     492,862