June 11, 2007

 

Monday: China soybean futures settle down on sluggish soymeal prices

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly lower Monday, pressured by sluggish soymeal cash prices.

 

The benchmark January 2008 soybean contract settled RMB19 lower at RMB3,336 a metric tonne.

 

Total trading volume rose to 271,598 lots from 268,852 lots Friday. One lot is equivalent to 10 tonnes.

 

Soymeal prices have been falling in recent weeks as demand from feedmeal sector hasn't picked up.

 

In Jiangsu province, prices of average-protein soymeal were at RMB2,280-RMB2,380/tonne last week, compared to RMB2,310-RMB2,400/tonne a week earlier.

 

Traders said soymeal prices will likely face more downward pressure in the near term.

 

Meanwhile, soyoil prices lost their upward momentum after the recent rise.

 

With the government paying close attention to possible inflationary pressure caused by higher soyoil and pork prices, traders were eager to sell their soyoil stocks to lock in profit, said analysts.

 

"There are concerns that the consumer price index in May, to be announced tomorrow, will grow by above 3% on year, triggering another central bank rate hike," said Ma Mingwang, an analyst at Tianqi Futures.

 

Soymeal futures and soyoil futures settled lower.

 

The benchmark September 2007 soymeal contract settled RMB1 lower at RMB2,530/tonne, while the benchmark September 2007 soyoil contract settled RMB110 lower at RMB7,834/tonne.

 

Corn futures settled lower with the benchmark September 2007 contract down RMB10 at RMB1,646/tonne.

 

Trading volume for all corn contracts rose to 313,822 lots from 231,888 lots Friday.