February 22, 2008

 

Friday: China soybean futures settle mostly up on rising soyoil

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Friday, with the benchmark September 2008 contract hitting new highs on higher soyoil prices.

 

The September 2008 soybean contract settled RMB6 higher at 5,074 a metric tonne.

 

With its soybean acreage forecast - of 71 million acres - the U.S. Department of Agriculture's Outlook Forum didn't have any surprises for the market.

 

The performance of edible oils will depend on crude oil, said Xiao Jun, an analyst at Shanghai JCI, adding there could be some downward risks in edible oil prices in the near term following a recent surge.

 

However, expectations that China's demand for oilseeds and edible oil will remain strong continue to support the market.

 

China's soybean imports in February could reach 2.7 million tonnes, more than double the 1.18 million tonnes imported during the same period last year, according to China National Grain and Oils Information Center's latest forecast.

 

Although China issued lower-than-expected soyoil import numbers in January, analysts don't expect the country's demand for edible oil to fall.

 

The country imported 150,000 metric tonnes of soyoil in January, down 20.3% from a year earlier, according to preliminary data issued by the General Administration of Customs Friday.

 

Analysts earlier estimated China's imports at between 200,000 and 300,000 tonnes of soyoil in January, higher than the 189,206 tonnes imported in January last year.

 

Rising soyoil prices on the Chicago Board Of Trade have driven up import costs, which may have helped curb demand, said Dong Shuangwei at Capital Futures.

 

He said as the government aims to expand its state reserves of edible oils to prevent prices from surging further and to ease inflationary pressure, increased demand later this year will likely push CBOT soyoil prices higher.

 

While some economists and analysts worried China's price controls on major commodities prices could reduce producers' profits and result in tighter supply and thus higher prices later, Zhou Wangjun, deputy chief of the pricing department under the National Development and Reform Commission said overnight during a discussion broadcast on state TV that the measure would remain in place for a while as there is possibility of further price surges.

 

Palm oil futures and soyoil futures also settled at new highs.

 

Soymeal futures and corn futures settled mostly lower on expectations of sluggish feedmeal demand, as the hog industry is heavily hit by the snow storms.

 

Friday'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      5,074         Up     6          786,860

Corn       Sep 2008      1,792         Dn    14          417,454

Soymeal  Sep 2008      3,544         Dn    39         713,304

Palm Oil   May 2008     11,064        Up    14          54,370

Soyoil      May 2008     12,682        Up   116         335,044