Monday: China soy futures drift lower, catching up to CBOT losses

 

 

Soybean futures fell slightly on the Dalian Commodity Exchange Monday, as the market reopened after the week-long Chinese New Year holiday to play catch-up with losses on the Chicago Board of Trade.

 

The benchmark September 2009 soybean contract lost 0.3% to settle at RMB3,376 a metric tonne.

 

"Chicago prices dropped while we were celebrating Chinese New Year," said Xu Wenjie, of Tianma Futures. "There's still a lot of worry about drought conditions (in Argentina)."

 

Soybean futures on the Chicago Board of Trade settled at US$9.80 a bushel Friday, down 29 cents from a week earlier, before the Chinese New Year break began.

 

Slight gains on the Chicago bourse Friday were driven mostly by end-of-the-month short covering, even as market participants continued to fret over dry weather conditions threatening Argentine crops. Freight prices rose US$4 a metric tonne last week, Wen said, nudging soybeaacn import prices up 20-30 cents a bushel.

 

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

 

Corn and soymeal futures posted gains Friday while palm oil futures lost 2.7% and soyoil futures shed 2.1%.

 

State reserve purchases were still propping up corn prices, said Wang Cheng, an analyst with Nanhua Futures.

 

"After Chinese New Year, supply is also tighter, so that's good for prices," he said.

 

With soymeal prices squeezed higher as more poultry needs to be fed, farmers are turning to corn as a substitute feed, which in turn drives up corn prices, Wang said.

 

Cash domestic soybean prices in Heilongjiang, a major producing province, rose slightly from the Friday before Chinese New Year to RMB3,440-3,460/tonne, said Wang Shaoguang of Galaxy Futures. 

 

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

 

Contract    Settlement    Price        Change     Volume

Soybean    Sep 2009      3,376        Dn   11    204,900

Corn          May 2009      1,577        Up   11    118,276

Soymeal    May 2009      2,704        Up   33    339,218

Palm Oil     May 2009      5,040        Dn  142     58,630