January 10, 2008
Thursday: China soybean futures settle down on govt price control warning
Soybean futures traded on the Dalian Commodity Exchange settled lower Thursday, after the government warned the market of price control measures.
The benchmark September 2008 soybean contract settled RMB40 lower at 4,690 a metric tonne.
The State Council said Wednesday that China will regulate grain, edible oil and meat prices ahead of the Lunar New Year in early February.
A State Council meeting chaired by Premier Wen Jiabao asked local governments to guarantee the supply of these daily necessities.
China will strengthen price checks and fight against unreasonable price rises, it said.
The government has issued many measures recently to control rising edible oil prices, including plans to import more soybean and soyoil to meet domestic demand.
But these measures will have limited impact on the market as supply is insufficient.
Analysts said the last measure the government can use is administrative control, but the impact would be short term.
"Prices are unlikely to fall much, they may only be stable ahead of the Lunar New Year," said Dong Shuangwei, an analyst at Capital Futures.
Palm oil futures settled mostly higher on concerns of reduced output in Malaysia, while soyoil futures and soymeal futures settled mostly lower.
Corn futures settled almost unchanged.
Rain in Malaysia has affected its December palm oil output, and possible heavy rains in January will likely to result in a big output reduction as well, said analysts.
China doesn't produce palm oil, and gets most of its supplies from Malaysia.
Thursday'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 4,690 Dn 40 665,890
Corn Sep 2008 1,837 Up 1 332,834
Soymeal Sep 2008 3,423 Dn 27 419,842
Palm Oil May 2008 9,606 Up 96 27,962
Soyoil May 2008 10,484 Dn 6 119,468
