April 10, 2009

Soybean futures posted slight gains on the Dalian Commodity Exchange Friday, their rise curbed by government stockpiles, despite a stronger rally in the soy complex led by the Chicago Board of Trade.

 

Weather issues, uncertainty surrounding the Argentine crop and a smaller-than-expected increase in U.S. plantings are tightening the supply outlook.

 

The benchmark September 2009 soybean contract climbed 0.4% to settle at RMB3,624 a metric tonne.

 

But Chinese soybean futures have risen slower than their counterparts since much of the price sensitivity has been protected by a 6-million-tonne government stockpile, purchased at RMB3,700/tonne, analysts said.

 

Soybean futures have risen only about a third versus soybean meal futures, said Wang Shaoguang of Galaxy Futures.

 

"Soybean futures have not been very buoyant, and while the soy complex is tracking the CBOT rally, soybean's increases are being pulled back by government stockpiling," Wang said.

 

Soy meal and soybean oil rely largely on imported soybean, which has been far more responsive in prices to tightening supply than domestic soybean.

 

Soybean futures on the CBOT settled higher Thursday, supported by tighter old crop supply and steady demand data.

 

"Price gains have been led by soybeans, which have climbed to two-month highs," Barclays Capital said in a note Friday.

 

"For soybeans, key supportive factors remain in place: China's imports so far in 2009 have been very robust; concerns remain about the effect of the drought on Argentine crops; and there has been no resolution between farmers in Argentina and the government over the export tax."

 

A key U.S. Department of Agriculture report added to positive price sentiment, reporting the lowest soybean stocks since 2003-04.

 

Soy meal, corn, palm oil and soy oil futures posted gains across the board Friday.

 

Friday's settlement prices in yuan a metric 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         3,624       Up   16      442,226

Corn              Sep 2009         1,696        Up    8      108,624

Soy Meal        Sep 2009         2,914        Up    2   1,125,050

Palm Oil         Sep 2009         5,944        Up  120     245,378

Soy Oil           Sep 2009         6,672        Up   68     728,526