August 28, 2007

 

Tuesday: China soybean futures settle up on CBOT, strong fundamentals

 

 

Soybean futures traded on the Dalian Commodity Exchange settled higher Tuesday, tracking overnight gains on the Chicago Board of Trade.

 

The benchmark May 2008 soybean contract settled RMB28 higher at RMB3,676 a metric tonne.

 

Total trading volume declined to 374,198 lots from 421,340 lots Monday. One lot is equivalent to 10 tonnes.

 

CBOT soybean futures ended higher Monday, climbing to session-highs late on technically-inspired buying and lingering crop concerns.

 

Expectations of inflation have also been supporting domestic agricultural products futures.

 

Farmers' Daily, a government-backed newspaper, said in its commentary Tuesday that hikes so far this year have been reasonable, as prices of agricultural products have been sluggish for years.

 

It expects prices to remain high for a long period on strong demand amid tight supply.

 

The commentary also suggested that the government release its reserves to curb price inflation.

 

Still, the government supports a reasonable price rise, as long as the degree of the rise is not huge, said a trader at China National Cereals Trade Corp.

 

Soymeal futures and soyoil futures settled mostly higher.

 

The benchmark May 2008 soymeal contract settled RMB31 higher at RMB2,921/tonne, and the benchmark January 2008 soyoil contract settled RMB8 higher at RMB8,048/tonne.

 

Corn futures settled higher.

 

The benchmark May 2008 contract settled RMB13 higher at RMB1,602/tonne.

 

Trading volume for all corn contracts rose to 661,804 lots from 301,268 lots Monday.

 

Analysts expect corn output in northeast China to fall by around 6 million tonnes this year, due to the impact of a drought, which may contribute to an output decline of 1.4% from last year.

 

China's corn output last year totaled 145.48 million tonnes, according to data from China National Grain and Oils Information Center.