June 13, 2008

 

Friday: China soybean futures settle down; profit-taking on 8-day rally

 

 

China's soybean futures traded on the Dalian Commodity Exchange settled lower Friday on profit taking, after rising for eight sessions in a row.

 

The benchmark January 2009 soybean contracts settled RMB41 lower at RMB4,966/tonne, or down 0.8%, after trading between RMB4,932-RMB5,000/tonne. Prices of benchmark contracts rose by more than 10% over the past eight sessions.

 

"Profit taking by long position holders" and expectations that U.S. prices will fall pushed the domestic market lower Friday, said Li Dongji, an analyst at Guotai Junan Futures Co.

 

Favorable weather forecasts for next week in U.S. soybean growing areas may push prices at Chicago Board of Trade lower, analysts said.

 

However, chart analysis suggests that a significant downward trend in soybean prices isn't likely, and that prices are likely to consolidate at high levels, Li said.

 

Fluctuations in crude oil prices have been very large recently, and commodities markets have been tracking crude's moves.

 

But the market is waiting for further signs from the dollar, said Xiao Jun, an analyst at commodity consultancy firm Shanghai JCI. If the dollar gets stronger later in the year, it could be negative for soybean and other commodities markets.

 

Meanwhile, Chinese importers booked two to three cargoes of soybeans this week from the U.S. and Brazil, according to data on Friday from Shanghai JCI.

 

The reduced soybean purchases were due to the rise in soybean prices overseas, it said.

 

Soyoil futures and palm oil futures settled sharply higher.

 

It could be arbitrage traders pushing prices higher along with the rise at CBOT, given ample supply in the cash market, said analysts.

 

Corn and soymeal futures settled lower.

 

Following are Friday's settlement prices in yuan per metric tonne and volumes for all contracts in lots (one lot is equivalent to 10 tonnes):

 

Contract          Settlement          Price          Change          Volume

Soybean           Jan 2009           4,966          Dn  41           602,720

Corn                Jan 2009           1,911          Dn   5            570,104

Soymeal          Sep 2008           4,052          Dn  37           377,034

Palm Oil           Sep 2008          11,066         Up 100            20,632

Soyoil              Sep 2008          12,204         Up 256          407,022