January 17, 2008

 

Thursday: China soybean futures settle mixed; downside room limited

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mixed Thursday, but they have little downside potential after recent weakness.

 

The benchmark September 2008 soybean contract settled RMB1 higher at 4,749 a metric tonne.

 

The Dalian soybean contract has lagged its counterparts on the Chicago Board of Trade recently, and rising import costs will likely support domestic contracts, analysts said.

 

The market was still digesting the announcement of temporary price controls on essential commodities, including edible oils, to curb inflation.

 

Zhou Wangjun, deputy director of the National Development and Reform Commission's price department, said Thursday that the measures would help only to prevent a surge or "unreasonable" price rises, and that increasing output was key to stabilizing prices.

 

China's consumer price index growth has been above 6% in the past five months as of August, and the government's earlier measures to curb inflation failed.

 

"The price controls won't change people's feeling toward inflation (due to a supply shortage), although it may result in a lower inflation rate," China International Capital Chief Economist Ha Jiming said in a research note.

 

Palm oil futures settled mixed while soyoil futures settled higher, catching up with earlier strong gains in palm oil. Soymeal futures and corn futures both settled lower.

 

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      4,749         Up     1          1,029,252

Corn       Sep 2008      1,794         Dn     3            298,954

Soymeal  Sep 2008      3,416         Dn    38          811,762

Palm Oil   May 2008     10,116        Up     2            23,858

Soyoil      May 2008     11,058        Up    154         347,998