July 8, 2008
Tuesday: China soymeal futures settle sharply down tracking CBOT tumble
China's soybean meal futures traded on the Dalian Commodity Exchange settled sharply lower Tuesday, tracking a fall on the Chicago Board of Trade overnight.
The benchmark January 2009 soy meal contract settled RMB172 lower at RMB3,931 a metric tonne, or down 4.2%.
The benchmark futures were limit-down briefly in the morning session on weakening cash prices, before recovering a bit. They were limit-down again just before the exchange closed for the day.
"The cash prices are too high, and a correction is now expected," as soy meal has been overbought due to high demand, said Xiao Jun, an analyst at Shanghai JCI.
The high soy meal prices also curbed demand from the feedmeal sector, which is at comparatively low levels.
The benchmark January 2009 soybean contract settled RMB162 lower at RMB4,920/tonne, or down 3.2%.
The good weather forecast in U.S. major soybean producing areas and an accumulated big jump on the CBOT are likely to trigger a further downward correction in the U.S. market, said a senior industry participant with a state reserve house.
But he added the fall in the domestic market could be limited as local soybean futures prices have fallen a lot recently.
Meanwhile, the recent rise in the dollar and the drop in crude oil prices on the New York Mercantile Exchange overnight added to the pressure, curbing the inflow of speculative funds, said analysts.
Soybean oil, palm oil and corn futures all settled 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 4,920 Dn 162 692,664
Corn Jan 2009 1,883 Dn 26 456,398
Soymeal Jan 2009 3,931 Dn 172 776,674
Palm Oil Sep 2008 10,442 Dn 86 22,346
Soyoil Jan 2009 11,514 Dn 142 125,100
