April 30, 2008

 

Wednesday: China soybean futures settle mostly higher on limited stocks

 

 

China's soybean futures traded on the Dalian Commodity Exchange settled mostly slightly higher Wednesday due to limited old crop stocks.

 

The benchmark January 2009 soybean contract settled RMB10 higher at RMB4,054 a metric tonne, or up 0.25%, after trading between RMB4,030 and RMB4,077/tonne.

 

The benchmark contracts were lower at the start of the session, but were pushed higher by the September 2008 contracts on concerns about insufficient supply.

 

Stocks of domestic soybeans in processing plants in northeast China can only last for a few months, while the new harvest season starts from October, said Xu Wenjie, an analyst at Tianma Futures Co.

 

The Federal Reserve's rate decision due late Wednesday is also closely monitored as analysts expect the dollar to strengthen, which will put pressure on crude oil and thus spill over to the overall commodities market.

 

The market widely expect the Fed to lower its federal funds target rate another 25 basis points to 2.0%, but if the Fed indicates it may pause in the rate cut cycle, they dollar may rebound further, analysts said.

 

Trading wasn't active as many futures brokerages raised their margins for trading to reduce risks ahead of a long holiday.

 

Chinese financial markets will be closed Thursday through Sunday due to the Labor Day holiday.

 

Analysts said soybean contracts traded at the Chicago Board of Trade will face further downward pressure during China's break, as the farmers' strike in Argentina is unlikely to resume later this week as earlier expected.

 

Palm oil futures and soyoil futures settled mostly lower, pressured by the drop in crude oil futures overnight and expectations of a further recovery by the dollar.

 

Soymeal futures settled mostly higher but corn futures settled mostly lower.

 

Wednesday's settlement prices are in yuan per metric tonne, and volume for all contracts is in lots (one lot is equivalent to 10 tonnes):

 

Contract          Settlement          Price          Change          Volume

Soybean            Jan 2009          4,054          Up 10            708,376

Corn                  Jan 2009         1,963          Dn   6            504,134

Soymeal           Sep 2008          3,315          Up 13            156,176

Palm Oil            Sep 2008        10,146          Dn 22               5,310

Soyoil               Sep 2008        10,826          Dn 48           326,038