February 20, 2008

 

Wednesday: China soybean futures settle down on profit-taking; soyoil up

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday on profit-taking after recent strong gains.

 

The benchmark September 2008 soybean contract settled RMB15 lower at RMB5,009 a metric tonne.

 

Soybeans and soybean products as well as vegetable oil are experiencing a downward correction after high January Consumer Price Index data spurred expectations of another round of tightening in monetary policies, said analysts.

 

But China's demand for soybeans is likely to rise, as it will increase soybean purchases for state reserves to meet rising demand ahead of the Olympics, while the country's overall oilseeds output fell last year due to reduced acreage as farmers shifted to higher-profit crops, said Tu Xuan, an analyst at commodities analysis firm Shanghai JCI.

 

Chinese soybean importers booked an average of seven to nine cargoes in the past two weeks through the Lunar New Year holiday, unchanged from the amount booked in the week ended Feb. 1, according to JCI data.

 

Palm oil futures and soyoil futures settled higher, despite losses in the morning session.

 

Small investors chose to take profits at the start of the trading session as edible oil futures, especially soyoil, have seen gains of more than RMB1,000/tonne following the Lunar New Year holiday break.

 

"It's quite normal to see profit-taking and a technical correction at this time," said Dong Shuangwei at Capital Futures.

 

But record-high crude oil futures settlement prices and soyoil's record high close on the Chicago Board of Trade overnight finally managed to shift sentiment back to bullish territory.

 

Soymeal futures and corn futures settled mostly slightly lower.

 

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

 

                Contract     Settlement Price  Change     Volume

Soybean   Sep 2008      5,009         Dn    15          701,584

Corn        Sep 2008      1,810         Unchanged      928,634

Soymeal   Sep 2008      3,566         Dn    21       1,165,362

Palm Oil   May 2008     10,854         Up   110           51,186

Soyoil      May 2008     12,414         Up     8           489,712