April 24, 2008

 

Thursday: China soybean futures settle down on price control concerns

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Thursday on concerns about government policy dealing with price control.

 

The benchmark January 2009 soybean contract settled RMB38 lower at RMB4,171 a metric tonne after trading between RMB4,152 and RMB4,191/tonne.

 

China's economic planner said Wednesday it will strengthen price control on major commodities during the May 1 Labor Day holiday through measures such as more closely monitoring prices.

 

The government aims to prevent "unreasonable price hikes" in major commodities including edible oil, meat, eggs and milk during the peak consumption season, said the National Development and Reform Commission.

 

"The market has been consolidating recently under the pressure of policy control, and (the situation) is unlikely to change much (in the near term)," said Huang Xiao, a manager at Capital Futures.

 

China launched a temporary price control policy earlier this year amid surging commodities prices, which put high pressure on inflation.

 

Meanwhile, some capital flowed out of the futures market into the stock market, which surged Thursday from its recent tumbles on the government's supporting policy of a stamp duty tax cut.

 

As a result, trading was not as active as yesterday, said traders.

 

Investors were also reluctant to trade aggressively amid uncertainties including a possible resumption of a strike by farmers in Argentina and the planting progress of corn in the U.S.

 

The slow process in corn planting may result in acreage being switched to soybeans later, said a person from the purchase department of a feedmeal company.

 

Palm oil futures, soyoil futures and soymeal futures settled mostly lower, while corn futures settled mostly slightly higher.

 

Thursday'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           4,171           Dn 38           660,584

Corn                 Jan 2009          1,920            Up  4           514,868

Soymeal          Sep 2008           3,367           Dn  9            247,490

Palm Oil           Sep 2008         10,576           Dn 60             32,372

Soyoil              Sep 2008         11,466           Dn  4            298,260