May 21, 2008

 

Wednesday: China soybean futures settle slightly up on freight fee surge

 

 

China soybean futures traded on the Dalian Commodity Exchange settled slightly higher Wednesday, supported by rising freight fees.

 

The benchmark January 2009 soybean contract rose RMB4, or 0.1%, to RMB4,457 a metric tonne after trading between RMB4,420 and RMB4,517/tonne.

 

Despite a recent sluggish performance by soybean futures on the Chicago Board of Trade, the surge in the Baltic Dry Index - a closely watched index of bulk-shipping rates - have been supporting DCE soybeans, said Capital Futures analyst Dong Shuangwei.

 

However, overall sentiment is weak.

 

The most heavily traded January 2009 contracts opened higher and remained in positive territory for most of the morning session, but edged lower in the afternoon.

 

Analysts said the recent earthquake in China's Sichuan province may have helped push domestic food prices higher, although it won't have a big impact on the overall economy.

 

So far, there hasn't been a spike in food prices across the country, but it is possible the sentimental impact of the earthquake on food prices will be seen next week, resulting in a rise in the May consumer prices index growth rate, said CLSA, a Hong Kong-based brokerage, investment banking and private equity group.

 

The increasing release of state food reserves to the quake-hit areas will tighten the country's reserves levels and may make it more difficult for the government to keep prices under control, said Dong.

 

Sichuan accounts for 6% of China's total grains output and 8% of the oilseeds output, according to the Ministry of Agriculture.

 

Palm oil futures and soyoil futures settled mostly lower.

 

Corn futures settled lower, while soymeal futures settled mixed.

 

Wednesday'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           4,457          Up   4          1,320,594

Corn                 Jan 2009          1,910          Dn  10            430,254

Soymeal           Sep 2008          3,645          Up  13            485,546

Palm Oil           Sep 2008         10,420          Dn  12             10,146

Soyoil              Sep 2008         11,016          Dn  42            217,196