July 31, 2007

 

Tuesday: China soybean futures settle up; supported by soyoil prices

 

 

Soybean futures traded on the Dalian Commodity Exchange settled higher Tuesday, supported by rising soyoil prices.

 

The benchmark January 2008 soybean contract settled RMB35 higher at RMB3,389 a metric tonne.

 

Total trading volume rose to 313,346 lots from 252,686 lots Monday. One lot is equivalent to 10 tonnes.

 

Rising soyoil demand, due to the pending Mid-autumn Festival and National Day holiday starting from late September, along with reduced domestic and international soybean output, helped to push soyoil prices higher, said Dalu Futures.

 

A severe drought in China's Heilongjiang province is unlikely to ease in the coming days, said the Office of State Flood Control and Drought Relief Headquarters Tuesday.

 

There will be little rainfall in the next 10 days in the province, a major soybean and corn growing region, and the situation remains "very stern," it said.

 

July and August are crucial growing seasons for soybean and corn in northeast China.

 

About 4 million hectares have been affected by the drought in the province, 39% of which is under serious condition.

 

About 440,000 hectares will be unable to produce any grain as a result of the drought, it said.

 

Meanwhile, soybean futures on the Chicago Board of Trade were underpinned to an extent by hot and dry near-term weather forecasts, although the upside was capped by longer-term outlooks indicating rain at the weekend.

 

Soymeal futures settled higher and soyoil futures settled mostly higher.

 

The benchmark January 2008 soymeal contract settled RMB43 higher at RMB2,626/tonne, and the benchmark January 2008 soyoil contract settled RMB76 higher at RMB8,418/tonne.

 

Corn futures also settled higher.

 

The benchmark January 2008 contract settled RMB14 higher at RMB1,522/tonne.

 

Trading volume for all corn contracts rose to 629,246 lots from 521,976 lots Monday.