February 21, 2008

 

Thursday: China soybean futures settle up, await USDA outlook forum

 

 

Soybean futures traded on the Dalian Commodity Exchange settled at new highs Thursday on bullish expectations of tighter 2008-09 supply to be announced tonneight at the U.S. Department of Agriculture's Outlook Forum.

 

The benchmark September 2008 soybean contract settled RMB59 higher at RMB5,068 a metric tonne.

 

The USDA forum will forecast major crops' acreage this year, such as soybeans, corn and wheat.

 

The market is expecting tighter supply of soybeans in 2008-09 due to increasing demand for edible oil for both biofuels and human consumption, despite a possible increase in soybean acreage.

 

The key is by how much soybean acreage will increase, said Zhao Qiang, research manager at Tianqi Futures.

 

He said traders at the Chicago Board of Trade will continue to push soybean prices higher ahead of the release of harvested South American soybeans in the market from late March.

 

Palm oil futures and soyoil futures also settled at new highs on continued strong expectations of reduced rapeseed output.

 

China is facing heightened pressure to provide the domestic market with enough edible oil this year, following recent heavy snowstorms that severely impacted oilseed crops, the Ministry of Agriculture said Thursday.

 

Prices of domestic agricultural products also face greater upward pressure as a result, it said.

 

Soymeal futures settled higher, while corn futures settled mostly lower.

 

The heavy snow has also severely affected the hog and poultry industries, and it will take a longer time for hog breeding to recover after the hog shortage that developed last year, said analysts.

 

As a result, demand for feedmeal, especially corn, will be capped, they said.

 

China aims to fully restore livestock and poultry production by August and that of hogs by December, the ministry said earlier this month.

 

Thursday'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

Soybeans Sep 2008      5,068         Up   59           657,978

Corn        Sep 2008      1,806         Dn    4            466,802

Soymeal  Sep 2008      3,583         Up    17          786,404

Palm Oil   May 2008     11,050        Up   196           64,532

Soyoil      May 2008     12,566        Up   152          342,140