June 26, 2008
Thursday: China soybean futures settle sharply up, tracking CBOT rally
Soybean futures traded on the Dalian Commodity Exchange settled sharply up Thursday, tracking overnight gains in Chicago Board of Trade soybean futures.
The benchmark January 2009 soybean contract rose 2.4% to settle at RMB5,043 a metric tonne, after trading between RMB5,021/tonne and RMB5,075/tonne.
"The U.S. weather conditions have become a major bullish factor, and we expect prices to remain at high levels, given the worries on weather conditions at one of the major production regions," said Liu Xinghua, an analyst at Great Wall Futures.
The adverse weather may already have affected output, and how far prices can go depends on how long the weather conditions persist, Liu said.
DTN Meteorlogix, a business weather information provider, has forecast rainfall up to 2.5 inches in the next three days, which may result in some renewed flooding and hold back field work and replanting efforts.
Meanwhile, "a relatively tight spot market indicates that soybean meal prices will probably have more upside on the back of higher cash prices due to a strong seasonal demand," said Tianqi Futures.
Soybean is crushed to make soy meal and soybean oil, from which feedmeal and edible oil are produced.
Soy meal and soy oil futures also settled higher, with profit-taking trimming earlier gains of soy meal.
Corn futures settled little changed. "The strong demand for feedmeal is more likely to send corn prices higher than lower at the moment," said Liu.
Corn is still mostly used to make feedmeal in China.
Thursday's settlement prices in yuan a metric tonne and volume for all contracts in lots:
Contract Settlement Price Change Volume
Soybeans Jan 2009 5,043 Up 116 510,258
Corn Jan 2009 1,921 Up 5 319,616
Soymeal Jan 2009 4,014 Up 91 840,804
Palm Oil Sep 2008 10,586 Up 188 22,358
