August 1, 2008
Friday: China soybean futures settle sharply down on supply pressure
China's soybean futures traded on the Dalian Commodity Exchange settled sharply lower Friday on supply pressure and a weak sentiment.
The benchmark January 2009 contract settled RMB145 lower at RMB4,402 a metric tonne, or down 3.2%, after trading in a wide RMB4,370-RMB4,507/tonne range.
The surge in soybean and vegetable oil imports in the first half of the year far exceeded the increase in demand, and the market may see further losses, said Huang Xiao, an analyst at Capital Futures.
The continuous losses in crude oil prices and the falling freight fees curbed funds' investment interest.
Negative sentiment guided all agricultural futures traded on the DCE, with speculative funds selling shorts.
As long as Chicago Board Of Trade soybean and soybean oil don't surge, domestic short-selling will likely continue, said a local oil trader.
Concerns over a possible policy control on edible oil prices, through measures such as reserve sales during the Olympics, also plagued the market.
Soy oil, palm oil, soybean meal and corn futures all settled lower.
China's total oilseed production in the 2008-09 crop year is expected to reach 56.2 million tonnes, up 3.4 million tonnes on year, on an expected rise in soybean and rapeseed production, the U.S. Department of Agriculture said in its report released Friday.
However, some long position holders didn't sell actively on expectations of some rebound.
"Anyway, soy oil prices have fallen too much recently," a local oil trader said.
Friday'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 4,402 Dn 145 1,035,862
Corn Jan 2009 1,816 Dn 23 384,530
Soy Meal Jan 2009 3,643 Dn 107 621,664
Palm Oil Sep 2008 8,608 Dn 196 34,262
Soy Oil Jan 2009 9,820 Dn 300 267,378
