March 13, 2008
Thursday: China soybean futures settle down ahead of supply pressure
Soybean futures traded on the Dalian Commodity Exchange settled lower Thursday on expected supply pressure ahead of the arrival of new South American soybeans.
The benchmark January 2009 soybean contract settled RMB19 lower at RMB4,451 a metric tonne.
The arrival of new South American soybeans from early April will ease the current tight supply, while the likelihood of an increased domestic soybean acreage this year will also provide an excuse for selling in the long run, said analysts.
The downward correction is unlikely to end soon, said Shen Enxian, an analyst at Zhongqi Futures in Shenyang city, adding the market may consolidate in a tight range before falling further.
Chinese traders are not buying imported soybeans actively in expectation of lower prices, as the South American output is higher than market expectation; the purchase is unlikely to increase significantly in the coming weeks, said China National Grain and Oils Information Center in its weekly note.
Palm oil futures and soymeal settled mostly higher Thursday, while soyoil futures and corn futures settled lower.
The high soyoil prices have curbed demand, which may continue to dwindle in the near term amid falling prices, analysts said.
Crude oil prices don't have much room to rise further after breaking $100 a barrel, as a further rise will result in an economic slowdown and damp demand, said Shen.
Traders expect the demand for feedmeal, including soymeal and corn, will start to pick from April, tracking a recovery of the livestock industry.
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 Jan 2009 4,451 Dn 19 1,504,344
Corn Sep 2008 1,813 Dn 8 592,354
Soymeal Sep 2008 3,476 Up 8 1,096,898
Palm Oil May 2008 11,136 Up 104 45,632
Soyoil Sep 2008 11,974 Dn 18 899,240
