September 27, 2007

 

Thursday: China soybean futures settle up; funds flow from soyoil

 

 

Soybean futures traded on the Dalian Commodity Exchange settled higher Thursday, as funds flowed into soybeans from soyoil.

 

The benchmark May 2008 soybean contract settled RMB68 higher at RMB4,198 a metric tonne.

 

Total trading volume rose to 1,041,518 lots from 881,286 lots Wednesday. One lot is equivalent to 10 tonnes.

 

Soyoil contracts are at high levels and may need some correction in the near term, said market participants.

 

The market may have reached the consensus that soyoil prices are at a proper level, said a trader with a state-owned vegetable oil company.

 

China issued a slue of policies recently aimed at curbing volatile food prices that sent inflation to a decade high.

 

But these measures seem to have a limited impact on the market amid expectations of further consumer-price inflation.

 

The fight between liquidity-driven funds and the policy-led pressure is likely to be more severe for now, and soybean prices aren't likely to surge continuously as a result, said Huang Xiao, a manager at Capital Futures Co.

 

Soymeal futures settled mostly higher and soyoil futures settled mixed, with more than half of soyoil contracts untraded.

 

The benchmark May 2008 soymeal contract settled RMB46 higher at RMB3,222/tonne, and the benchmark May 2008 soyoil contract settled RMB28 higher at RMB8,328/tonne.

 

Trading volume for all soyoil contracts declined to 46,208 lots from 83,128 lots Wednesday.

 

Corn futures settled higher.

 

The benchmark May 2008 contract settled RMB15 higher at RMB1,660/tonne.

 

Total trading volume for corn futures declined to 434,792 lots from 510,670 lots Wednesday.