June 28, 2007

Thursday: China soybean futures settle up on physical delivery reports

Soybean futures traded on the Dalian Commodity Exchange settled higher Thursday on reports that some traders are taking delivery of soybeans from the exchange's warehouses.

"There are some reports about traders taking physical delivery of soybean, which are pushing up prices. If this trend continues prices may continue to rise," said a trader with a Beijing-based grains trading firm.

He said that a major reason why traders are taking physical delivery at the exchange is that Dalian futures prices are considerably lower than spot prices, which makes it cheaper to take delivery at the exchange.

An analyst with JCI Shanghai added that Chinese soybean futures are also factoring in weather concerns for the soybean crops in both U.S. and China.

Both soymeal and soymeal contracts settled mostly higher.

The benchmark January 2008 soybean No.1 contract settled RMB7 higher at RMB3,212/tonne.

The benchmark January 2008 soymeal settled RMB6 higher at RMB2,549/tonne, while the September 2007 soy oil contract settled RMB48 higher at RMB7,588/tonne.

Corn futures settled lower tracking sharply lower Chicago Board of Trade corn futures, with the January 2008 contract settling RMB4 lower at RMB1,561/tonne.