September 2, 2008
Tuesday: China soybean futures decline tracking tumble in crude oil
China's soybean futures traded on the Dalian Commodity Exchange settled sharply lower Tuesday tracking the tumble in crude oil prices.
The benchmark January 2009 soybean contract settled RMB121 lower at RMB4,216/tonne, or 2.8%, after trading in a range of RMB4,188-RMB4,232/tonne.
Crude oil futures slumped below US$110 a barrel to their lowest levels in 5 months Tuesday, driven by anticipation that Hurricane Gustav's passage through the Gulf of Mexico has had little significant impact on the region's oil production facilities.
Expectations of the U.S. dollar gaining strength, which may reverse its bearish performance, also forced funds to turn to the dollar instead of the commodities market, said analysts.
The market is now watching the extent to which demand can boost prices, and thus buyers are delaying refilling their stocks on expectations of a further fall in prices, said a local analyst at China National Cereals Trade Corp.
Meanwhile, analysts said it is difficult to boost demand in China amid a global slow down even as the market expects the government to come out with policies that will help stimulate demand with the Olympic games ending.
China needs a growth rate of above 10% to maintain reasonable employment, steady consumption and demand, they said.
Soyoil futures, palm oil futures, soymeal futures and corn futures settled lower.
Ample supplies of palm oil dragged down vegetable oil prices, making them the worst performer in the market.
Tuesday'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 4,216 Dn 121 964,524
Corn Jan 2009 1,743 Dn 17 327,158
Soymeal Jan 2009 3,574 Dn 103 564,936
Palm Oil Jan 2009 7,340 Dn 126 74,404
Soyoil Jan 2009 8,972 Dn 306 436,872
