July 19, 2007

 

Thursday: China soybean futures settle down; prices may rebound

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Thursday on sluggish demand, but analysts say prices may rebound from their recent slump.

 

The benchmark January 2008 soybean contract settled RMB11 lower at RMB3,298 a metric tonne.

 

Total trading volume declined to 142,398 lots from 170,164 lots Wednesday. One lot is equivalent to 10 tonnes.

 

Sluggish soymeal demand and ample stocks at Chinese ports have been pushing domestic soybean futures lower recently.

 

But expectations that soymeal demand could recover by early next year will help support domestic soybeans, said Zhao Qiang, research manager at Tianqi Futures.

 

A move by the Chinese government to tackle rising pork prices by encouraging the breeding of pigs may spur more demand for soymeal.

 

Traders generally expect soybean prices to rise in the long term.

 

Meanwhile, soybean futures at Chicago Board of Trade looks set to remain sluggish in the near term after the overnight upptick lagged behind recent declines, said traders.

 

Soymeal futures settled mostly lower in Dalian but soyoil futures were mostly higher.

 

The benchmark January 2008 soymeal contract settled RMB16 lower at RMB2,603/tonne, while the benchmark September 2007 soyoil contract settled RMB16 higher at RMB8,096/tonne.

 

Corn futures settled higher. The benchmark January 2008 contract settled RMB7 higher at RMB1,512/tonne.

 

But traders said the rise could be temporary because stock are ample and demand is slow from the feedmeal and industrial sectors.

 

Global corn acreage, including in China, will likely continue to grow in 2008 on expectations of high corn demand, said Zhao.

 

Trading volume for all corn contracts rose to 390,914 lots from 322,152 lots Wednesday.