July 1, 2008

 

Tuesday: China soybean futures rise tracking CBOT; low demand weighs

 

 

China's soybean futures traded mostly higher Tuesday on the Dalian Commodity Exchange, tracking the overnight rally at Chicago Board of Trade on tight supply forecasts.

 

The benchmark January 2009 soybean contracts settled RMB21 higher at RMB5,144/tonne, or 0.4%, after trading between RMB5,105-RMB5,148/tonne.

 

However, the old crop contracts September 2008 settled RMB3 lower at RMB5,815/tonne, as traders deemed the prices expensive following a 28% gain since April 1 from RMB4,531, and given the sluggish local demand.

 

The sluggish demand for soyoil amid ample stocks don't support higher prices, said Tu Xuan, an analyst at Shanghai JCI, a commodity consultancy firm.

 

CBOT soybeans rallied Monday as the U.S. Department of Agriculture's acreage forecast suggested supplies may remain tight even through next year, although the forecasts were above the average of trade estimates.

 

"The domestic soybean and soyoil will be lower if not supported by the (CBOT)," said Dong Shuangwei, an analyst at Capital Futures.

 

Total trading volume of soybean contracts declined to 392,694 lots from 413,906 lots Monday.

 

Soyoil and palm oil futures settled mostly higher.

 

Soyoil prices were trying to take the advantage of the rise in CBOT to catch up with the earlier strong gains of soymeal, although the cash demand for soyoil didn't effectively improve, said analysts.

 

The record high prices of soymeal and the dwindling demand in southern feedmeal consumption area may limit further rise in soymeal prices and help support soyoil prices, said a local trader.

 

The cut in service fee for palm oil futures transactions at the Dalian bourse didn't affect the market Tuesday, with trading volume falling to 28,020 lots compared with 39,478 lots Monday.

 

The Dalian bourse temporarily cut the service fee from Tuesday to Dec. 31 to boost palm oil's trading volume, but analysts said the market will still be driven by fundamentals.

 

Soymeal futures settled mixed and corn futures settled mostly lower.

 

Tuesday'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           5,144           Up  21          392,694

Corn                Jan 2009            1,929           Dn   6          481,720

Soymeal           Jan 2009           4,080           Dn  23          850,942

Palm Oil           Sep 2008          10,804          Up  52            28,020

Soyoil              Sep 2008          12,044          Up 182          201,054