July 30, 2007

 

Monday: China soybean futures settle up; drought to cut crop output

 

 

Soybean futures traded on the Dalian Commodity Exchange settled higher Monday on domestic weather concerns.

 

The benchmark January 2008 soybean contract settled RMB47 higher at RMB3,354 a metric tonne.

 

Total trading volume rose to 252,686 lots from 169,554 lots Friday. One lot is equivalent to 10 tonnes.

 

Northeast China, a major soybean and corn growing region, has been experiencing a drought since June, which affected crop growth there.

 

Analysts said the drought, occurring in the crucial growing season, will result in sharply reduced crop output.

 

The drought will likely continue to the end of July, said state-owned Jilin Grain Center Wholesale Market.

 

Soymeal futures and soyoil futures settled higher.

 

The benchmark January 2008 soymeal contract settled RMB25 higher at RMB2,583/tonne, and the benchmark January 2008 soyoil contract settled RMB170 higher at RMB8,342/tonne.

 

Soyoil cash prices were sharply higher, especially in northeast Heilongjiang province, due to dwindling stocks and expectations of less soybean output.

 

Prices of fourth-grade soyoil in many Chinese cities were quoted RMB150-RMB300 a tonne higher Monday from Friday.

 

Corn futures also settled higher.

 

The benchmark January 2008 contract settled RMB13 higher at RMB1,508/tonne.

 

Trading volume for all corn contracts rose to 521,976 lots from 407,752 lots Friday.