March 23, 2009

China's soybean futures traded on the Dalian Commodity Exchange settled sharply higher Monday, supported by the jump on the Chicago Board of Trade Friday and a weak dollar.

 

The benchmark September 2009 soybean contract settled RMB100 higher at RMB3,634 a metric tonne, rising 2.8%, breaking through the resistance of RMB3,600/tonne.

 

Concerns over inflation boosted commodity prices, while the farmers' strike in Argentina helped the rise as well, said analysts.

 

"We expect elevated inflation expectations to support (U.S. treasury) yields and commodity prices," said Tim Condon of ING in his note released Monday.

 

While some analysts said soybean prices will likely continue to post gains for some time tracking a weaker dollar, an official with a grain and oil reserve house said the U.S. Department of Agriculture's end-March report on agricultural acreage, which is expected to hike the area for soybean, may add downward pressure on prices later.

 

China's February soybean imports surged 61% on year to 3.26 million tonnes, the General Administration of Customs said Monday.

 

The surge was due to lower global rates and as the government's purchase of local output put domestic product prices out of reach for many crushers.

 

Meanwhile, soybean oil supplies may continue to remain under pressure as local crushers switch to using higher volumes of imported soybeans because of the price difference, analysts said. Higher palm oil imports will also squeeze the imported soy oil market, they added.

 

The trading volume of all soybean contracts more than doubled to 680,966 lots from 336,596 lots Friday.

 

The open interest rose 19,134 lots to 347,696 lots Monday.

 

Corn futures settled little changed, while soybean meal, soy oil and palm oil futures settled higher.

 

Soy meal futures rose sharply on higher cash prices, which are supported by tight stocks, said analysts.

         

Monday's settlement prices in yuan a tonne for benchmark contracts and volume for all contracts in lots (one lot is equivalent to 10 tonnes):

                              

Contract          Settlement         Price        Change       Volume

Soybean          Sep 2009          3,634        Up  100      680,966

Corn               Sep 2009          1,715        Dn    1        106,068

Soy Meal         Sep 2009          2,796        Up  105       836,222

Palm Oil          Sep 2009          5,520        Up  118       215,154

Soy Oil            Sep 2009         6,460        Up  150     1,158,280