April 1, 2008

 

Tuesday: China soybean futures limit-down on bearish USDA planting report

 

 

Soybean futures traded on the Dalian Commodity Exchange settled limit-down Tuesday on a bearish prospective planting report issued overnight by the U.S. Department of Agriculture.

 

Soybean futures, soyoil futures and palm oil futures all hit limit-down right after the opening and stayed unmoved for the whole session.

 

Soymeal futures nearly hit limit-down amid little buying interest.

 

The benchmark January 2009 soybean contract settled down RMB204 at RMB3,882 a metric tonne.

 

"The market is now focusing on a possible supply increase in the new crop year," ignoring positive factors like the strike by farmers in Argentina, said Dong Shuangwei, an analyst at Capital Futures.

 

The USDA pegged 2008 U.S. soybean acreage at 74.793 million, above trade expectations and up 18% from 2007's seeded acreage of 63.631 million.

 

Soybean stocks as of March 1 totaled 1.428 billion bushels, higher than the average estimate of 1.352 billion bushels and above the upper end of a range in a Dow Jones Newswires survey at 1.425 billion bushels.

 

Some traders expect benchmark soybean futures on the Chicago Board of Trade to test US$11 a bushel. May soybeans on CBOT settled 70 cents lower at US$11.97 1/4 Monday.

 

Analysts don't expect an immediate upward correction in agricultural products even though the recent tumble was overdone.

 

It's hard to say where the bottom is for soybeans, as the full impact from the U.S. subprime crisis is yet to be seen, said a local feedmeal trader.

 

An overnight tumble in crude oil futures added to the pessimistic sentiment in the market.

 

Corn futures fell along with the overall weakness in commodities, but the decline was limited, as the USDA report is bullish for the crop.

 

The USDA said farmers would plant 86.014 million acres to corn, down 8% from 93.6 million in 2007, when the area planted to corn was the largest since 1944.

 

Quarterly corn stocks were pegged at 6.859 billion bushels, which was much lower than expected.

 

Tuesday'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

Soybean            Jan 2009          3,882          Dn 204           37,442

Corn                 Sep 2008         1,768           Dn  22       1,672,384

Soymeal           Sep 2008          3,057          Dn 160           11,768

Palm Oil            May 2008         9,868           Dn 518               624

Soyoil               Sep 2008        10,206          Dn 536             4,482