February 01, 2008

 

Friday: China soybean futures settle up on rising edible oil prices

 

 

Soybean futures traded on the Dalian Commodity Exchange settled higher Friday, supported by rising soyoil prices.

 

The benchmark September 2008 soybean contract settled RMB55 higher at 4,720 a metric ton.

 

The ongoing heavy snow storms, which first struck southern, central and eastern China around Jan. 15, have seriously affected oilseed production.

 

Chen Xiwen, deputy director of the office under the Communist Party's leading panel on finance policies and top official for agricultural issues, said Thursday the impact of the storms on agricultural production could be substantial, depending on how long they last and whether they move north.

 

Although local traders said it's too early to estimate damage to the rapeseed crop for now, China may not be able increase rapeseed output much this year. This comes despite winter rapeseed crop acreage growth of 666,667 hectares from nearly 6 million hectares in 2007.

 

"There won't be much fluctuation in rapeseed output this year," said Liu Qin, vice manager of Sun Futures in Hunan province, a major rapeseed producing region.

 

Although official figure showed China's rapeseed output in 2007 totaled 12 million tons, local analysts' forecasts for last year were as low as 8 million tons.

 

Higher inflation concerns also helped to push agricultural product prices higher.

 

"Inflation will temporarily breach 7% in (the first quarter), before easing again. However, there are upside risks to the forecast if crop damage is severe," said the Royal Bank of Scotland in its recent research note.

 

Palm oil futures, soyoil futures, soymeal futures and corn futures all settled higher.

 

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

 

            Contract  Settlement Price  Change     Volume

 

Soybean      Sep 2008       4,720            Up  55      531,294

Corn            Sep 2008       1,752            Up   8      227,292

Soymeal      Sep 2008       3,295            Up  33      493,624

Palm Oil       May 2008       9,850            Up  72       38,802

Soyoil          May 2008     11,040            Up  76      248,028