May 21, 2007

 

Monday: China soybean futures settle up; ignore PBOC tightening steps

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Monday on strong fundamentals, shrugging off the central bank's latest round of tightening measures.

 

The benchmark September 2007 soybean contract settled RMB1 higher at RMB3,223 a metric tonne.

 

Total trading volume rose to 288,612 lots from 150,054 lots Friday. One lot is equivalent to 10 tonnes.

 

Late Friday, the People's Bank of China announced a broad tightening of monetary policy, including allowing the yuan to trade in a wider daily range, raising deposit and lending rates, as well as hiking banks' reserve requirement ratio by 50-basis points.

 

Given the low intensity, the moves are only symbolic, and thus unlikely to have much impact on demand for commodities products, said Ding Haijiang, a trader at Nanhua Futures Co.

 

Soymeal contracts settled mostly lower, but soyoil futures settled higher.

 

The benchmark September 2007 soymeal contract settled RMB11 lower at RMB2,591/tonne, while the benchmark September 2007 soyoil contract settled RMB24 higher at RMB7,364/tonne.

 

Processing plants are producing more soyoil due to higher soyoil prices, while soymeal demand hasn't picked up yet, analysts said.

 

Soymeal and soyoil are made by crushing soybeans.

 

Corn futures settled mostly higher. The benchmark September 2007 contract settled RMB2 higher at RMB1,679/tonne.

 

Trading volume for all corn contracts rose to 293,558 lots from 279,570 lots Friday.