May 20, 2008

 

Tuesday: China soybean futures settle down; along with CBOT fall

 

 

China's soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday, following a decline in prices on the Chicago Board of Trade overnight.

 

The benchmark January 2009 soybean contract settled RMB52 lower at RMB4,453 a metric tonne, or down 1.15%, after trading between RMB4,426 and RMB4,489/tonne.

 

Declines in old-crop contracts were much smaller than the fall in new-crop contracts, as the supply of domestic soybeans ahead of the harvest in September is quite limited, and the new crop faces pressure from increased planting acreage.

 

Soybeans managed to recover some lost ground in the afternoon session, supported by the possibility that the Argentine farmers strike could reduce arrivals of overseas soybeans at Chinese ports.

 

Earlier, more than 3 million tonnes of soybean were expected to be imported this month, but now the total could be less than this amount, said Huang Xiao, a manager at Capital Futures.

 

Despite the news that Argentine farmers are making moves that could end the rift with the government and raise exports again, the old crop September 2008 contracts succeeded in breaking into positive territory in the afternoon session, pushed higher on rising interest in limited near-term supply.

 

Yu Haifeng, an analyst at Tianqi Futures, expected the strike to end soon as the soybean harvest in Argentina is almost completed, and a continued strike would only increase farmers' sales costs.

 

"There is unlikely to be a breakthrough in the negotiations between farmers and the government (soon),...the talks will probably continue after the strike ends," he wrote in a note.

 

Palm oil futures and soyoil futures settled mostly lower.

 

Corn futures settled little changed, while soymeal futures settled mixed.

 

Following are Tuesday'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           4,453          Dn  52            869,162

Corn                Jan 2009           1,920       Unchanged         318,946

Soymeal          Sep 2008           3,632          Up   5             369,068

Palm Oil           Sep 2008          10,432         Dn 120              3,588

Soyoil              Sep 2008          11,058         Dn 176           215,208