August 8, 2007

 

Wednesday: China soybean futures settle up on limited supply, rising demand

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Wednesday on limited supply and rising demand.

 

The benchmark January 2008 soybean contract settled RMB9 higher at RMB3,428 a metric tonne.

 

Total trading volume declined to 359,854 lots from 375,528 lots Tuesday. One lot is equivalent to 10 tonnes.

 

The ongoing drought has affected soybean growing in Heilongjiang province, the crop's major producing region, and Inner Mongolia, which may result in the country's total soybean output reduction of 200,000 tonnes to 14.8 million tonnes, China National Grain and Oils Information Center said in a report issued Wednesday.

 

Farmers in Heilongjiang province have sold all of the soybeans produced in 2006, according to a local newspaper report.

 

Meanwhile, soybean imports in the coming months are likely to fall to less than 2.5 million tonnes per month, down from more than 2.5 million tonnes in each month from April-June, analysts forecast.

 

Soymeal futures and soyoil futures settled mostly higher.

 

The benchmark January 2008 soymeal contract settled RMB31 higher at RMB2,678/tonne, and the benchmark January 2008 soyoil contract settled RMB28 higher at RMB8,264/tonne.

 

Soymeal stocks at processing plants are at low levels due to the suspension of production when feedmeal demand was hit most by a reduced hog population following a blue ear disease outbreak. However, plants have started to purchase more soybeans with a recovery in the pig population.

 

Corn futures settled lower, with the benchmark January 2008 contract settling RMB8 lower at RMB1,535/tonne.

 

Trading volume for all corn contracts rose to 597,932 lots from 580,596 lots Tuesday.