February 14, 2008

 

Thursday: China soybean futures settle up on surging edible oil prices

 

 

Soybean futures traded on the Dalian Commodity Exchange settled higher Thursday, supported by rising vegetable oil prices in the wake of official estimates that crop losses sustained in ongoing snow storms in southern and eastern China would neutralize expected rapeseed harvest gains in 2008.

 

The benchmark September 2008 soybean contract settled RMB68 higher at 4,874 a metric tonne.

 

More than 40% of winter rapeseed crops have been damaged by the snow storms and more than 30% of vegetable crops have been impacted, said Zhang Yuxiang, chief economist of the Ministry of Agriculture, during a press conference Thursday.

 

China's vegetable oil prices are likely to rise further in the near term as a result, said Huang Hai, an assistant commerce minister.

 

Analysts expected rapeseed output this year to at most maintain the same level as last year, despite significant acreage expansion.

 

Winter rapeseed acreage increased by around 11% this year to around 6.65 million hectares due to a series of government promotion measures.

 

Xia Tian, an analyst at Yongan Futures, expects the country to import more soybeans and soyoil this year to make up for rapeseed crop losses.

 

According to official estimates, China produced 12 million metric tonnes of rapeseed in 2007. Private-sector analysts have put the figure much lower, at around 8 million tonnes.

 

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

 

The surge in corn and soymeal prices matched expectations that the demand for feedmeal would gradually increase after the Lunar New Year holiday in stride with a recovery of pig and poultry sectors, said the Dalian bourse in a statement.

 

Corn and soymeal, the performance of which were sluggish ahead of the holiday, also need to catch up with soybean and vegetable oil gains, it said.

 

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      4,874         Up    68           804,256

Corn        Sep 2008      1,795         Up    27          669,700

Soymeal  Sep 2008      3,449         Up   102          613,834

Palm Oil   May 2008     10,450        Up   158           45,916

Soyoil      May 2008     11,780        Up   238          248,448