August 13, 2008

 

Wednesday: China soybean futures settle up sharply on USDA supply report

  

 

Soybean futures traded on China's Dalian Commodity Exchange settled sharply higher Wednesday following a U.S. Department of Agriculture report that lowered estimated production.

 

The benchmark January 2009 soybean contract settled RMB139 higher at RMB4,073 a metric tonne, or up 3.5%, after trading in a wide range of RMB3,999-RMB4,130/tonne.

 

The contract briefly hit the 5% upper limit ahead of the closing bell.

 

The USDA estimated, based on the first field surveys of U.S. crops, that 2008-09 soybean production would total 2.973 billion bushels, down from the July estimate of 3.000 billion. The average of analysts' estimates anticipated a crop size of 3.003 billion bushels. The 2008-09 U.S. soybean yield was estimated at 40.5 bushels per acre, down from a July estimate of 41.6.

 

Some new long position holders took the news from the report as an opportunity to buy, as the market has tumbled recently.

 

Crude oil prices have been consolidating at around US$113 per barrel for a while, and there is sign that the prices may stabilize at above US$110, which may lend support to the commodities market, said Wang Lixia, an analyst at Green Futures Brokerage.

 

For now the market is keeping a close watch on crude oil, as it's too early to say that it has entered a bear market, she said.

 

Soyoil futures, palm oil futures, corn futures and soymeal futures all settled higher.

 

Soymeal futures also touched the upper limit during the session.

 

Wednesday's settlement prices in yuan per metric tonne and volume for all contracts in lots (one lot is equivalent to 10 tonnes):

 

Contract          Settlement          Price          Change              Volume

Soybean          Jan 2009            4,073           Up 139           1,408,810

Soymeal          Jan 2009            3,380           Up 134              878,868

Palm Oil           Jan 2009            7,676           Up 136               25,452