March 21, 2008

 

Friday: China soybean futures settle mixed; sentiment still weak

 

 

China's soybean futures traded on the Dalian Commodity Exchange settled mixed Friday, with prices fluctuating on weak sentiment.

 

The benchmark January 2009 soybean contract settled RMB33 lower at RMB4,056 a metric ton, after trading between RMB4,007/tonne and RMB4,105/ton.

 

The tumble in sessionsearlier this week and the previous week provided the market with opportunities for a technical correction, but uncertainty prevailed.

 

The market is likely to stay stable in the short term, but it is difficult to say whether it has hit the bottom, said Duan Yujie, a manager at Changjiang Futures.

 

There were rumors in the market China has defaulted on some soybean purchases in expectation of lower prices, which added to the weak sentiment.

 

Chinese importers booked 2-3 cargoes of soybeans from South America this week, lower than the 3-4 South American cargoes they booked last week, according to data from Shanghai JCI Friday.

 

However, it is too early to say the bull runin the soybean market has ended, despite the current weakness, traders said.

 

The ongoing drought in Heilongjiang province, the major soybean producer, and dwindling global stocks will help support prices, said Heilongjiang Jiusan Oil and Fat Co. in a statement.

 

About 5.8 million hectares, half of the province's total cultivable area, have been hit by a spring drought, according to data from the provincial government. Most of the drought-hit region produces soybean.

 

Palm oil and soybean oil futures settled mostly higher, after the steep fall in the past two weeks.

 

News India has cut import duty on palm oil were positive to the market, said Dong Shuangwei, an analyst at Capital Futures.

 

Corn futures settled higher but soymeal futures settled mostly lower.

 

Friday's settlement prices in yuan a metric tonne and volume for all contracts in lots (one lot is equivalent to 10 tons):

 

                   Contract     Settlement Price    Change     Volume

 

Soybean          Jan 2009              4,056             Dn  33     1,191,644

Corn               Sep 2008             1,783              Up  18        777,320

Soymeal         Sep 2008              3,190             Dn  14        673,678

Palm Oil          May 2008              9,866             Up  14         14,164

Soyoil             Sep 2008            10,614             Up  46        586,570