August 31, 2007

 

Friday: China soybean futures settle up on strong soymeal demand

 

 

Soybean futures traded on the Dalian Commodity Exchange settled higher Friday on increasing demand for soymeal, supported by tight supply.

 

The benchmark May 2008 soybean contract settled RMB54 higher at RMB3,779 a metric tonne.

 

Total trading volume rose to 430,664 lots from 355,448 lots Thursday. One lot is equivalent to 10 tonnes.

 

Demand has been increasing for soymeal, as farmers want to sell their pigs ahead of the Mid-Autumn Festival and National Day holiday starting late September, in fear of falling pork prices.

 

"The demand for better quality soymeal is strong, as farmers are eager to shorten the breeding period," said Shanghai JCI, a consultancy firm.

 

Pork prices have been falling for the third week in a row amid increased domestic supply and reduced demand due to high prices, with prices falling 6% as of Aug. 24 from early August levels as a result, according to data from the Ministry of Commerce.

 

Meanwhile, as China strengthened checks on imported soybeans due to a food safety dispute with the U.S., soybean imports discharged at Chinese ports have been delayed somewhat.

 

Earlier, there were rumors that the discharging of soybeans at Chinese ports had been suspended, but this was later proven untrue.

 

Soymeal futures and soyoil futures settled higher along with soybeans.

 

The benchmark May 2008 soymeal contract settled RMB24 higher at RMB3,023/tonne, and the benchmark January 2008 soyoil contract settled RMB44 higher at RMB8,082/tonne.

 

Corn futures settled mostly higher.

 

The benchmark May 2008 contract settled RMB5 higher at RMB1,628/tonne.

 

Trading volume for all corn contracts rose to 658,352 lots from 617,160 lots Thursday.