May 12, 2008

 

Monday: China soybean futures settle up sharply on USDA report

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled sharply higher Monday on a U.S. Department of Agriculture report with lower-than-expected estimates of ending stocks.

 

The benchmark January 2009 soybean contract settled RMB189 higher at RMB4,411 a metric tonne, or up 4.48%, after trading between RMB4,328 and RMB4,433/tonne.

 

Most soybean contracts hit limit up during the session, strongly supported by the USDA report issued Friday.

 

The USDA estimated U.S. 2007-08 soybean ending stocks at 145 million bushels, down 15 million from the 160 million estimated in April. It also estimated U.S. 2008-09 soybean ending stocks at 185 million bushels, well below the average analyst estimate of 273 million.

 

"The estimation, which is far below analysts' expectations, set a long-term bullish tone for the market," said Dong Liang, an analyst at Shanghai Jiuheng Futures Co.

 

Palm oil futures, soyoil futures and soymeal futures all settled sharply higher, with edible oil being supported by record high crude oil prices.

 

Most soyoil contracts hit limit up right after opening, and palm oil contracts almost hit limit up.

 

Corn futures settled higher.

 

An earthquake measuring 7.6 on the Richter scale struck Wenchuan county in the southwestern province of Sichuan - and was felt in many Chinese cities including Beijing, Shanghai and Chongqing - didn't have much impact on the commodities market.

 

The quake struck 92 kilometers northwest of Chengdu at 0628 GMT, the U.S. Geological Survey said on its Web site. It said the quake was centered 29 kilometers below the surface.

 

Meanwhile, an earthquake measuring 3.9 on the Richter scale struck Tongzhou district in Beijing at 0635 GMT, the official Xinhua News Agency reported Monday.

 

Duan Yujie, a manager at Changjiang Futures in Wuhan, said the earthquakes are unlikely to have much impact on the output of agricultural products, as Wenchuan is not a producing region.

 

But some analysts said earthquake news is usually bullish for agricultural products, as the supply may be cut off and there is the danger of a rush on purchases.

 

"It will have some psychological impact on the market, which may lead to some buying," said Dong.

 

Sichuan is a major rapeseed producing region, and it is now the harvest season for the crop.

 

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

 

Contract         Settlement         Price         Change         Volume

Soybean          Jan 2009          4,411         Up 189         852,002

Corn               Jan 2009          1,983          Up   4          833,088

Soymeal         Sep 2008          3,575         Up 134         429,404

Palm Oil          Sep 2008        10,718         Up 446          44,754

Soyoil             Sep 2008        11,326         Up 516          57,864