September 28, 2007

 

Friday: China soybean futures settle up on CBOT new highs

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Friday, with major contracts closing at record highs, after their counterparts at the Chicago Board of Trade set new contract highs overnight.

 

Analysts said the strong response to a government auction of vegetable oil signaled heated domestic demand for soybean oil, which pushed soybean prices higher.

 

The benchmark May 2008 soybean contract settled RMB5 higher at RMB4,203 a metric tonne, after trading between RMB4,166/tonne and RMB4,257/tonne.

 

Total trading volume declined to 923,078 lots from 1,041,518 lots Thursday. One lot is equivalent to 10 tonnes.

 

CBOT soybeans rallied to its highest levels in three years on weakness in the U.S. dollar, strong demand for soybeans and soy products, as well as yield uncertainties and concerns surrounding a dry start to Brazil's planting season.

 

Soybean meal futures settled mostly lower and soy oil futures settled higher.

 

The benchmark May 2008 soy meal contract settled RMB2 lower at RMB3,220/tonne, and the benchmark May 2008 soy oil contract settled RMB94 higher at RMB8,422/tonne.

 

Trading volume for all soy oil contracts surged to 72,252 lots from 46,208 lots Thursday.

 

The Chinese government sold 200,000 metric tonnes of vegetable oil Friday at the high end of market prices, indicating strong demand in the months ahead, said analysts.

 

China sold 178,000 tonnes of fourth-grade soy oil at an average price of RMB8,508/tonne, the National Grain and Oil Trade Center said in a statement published on its Web site, compared with domestic cash prices of between RMB8,400-RMB8,600/tonne this week.

 

The government also sold 22,000 tonnes of rapeseed oil at an average price of RMB9,083/tonne, said the center, compared with cash prices of between RMB8,800-RMB9,100/tonne.

 

The strong demand "showed the market is concerned about future supply due to potential cuts in soybean production in northeast China and the U.S.," said Kang Bing, a research manager at Jingyi Futures Co.

 

Analysts expected vegetable oil prices to rise near the end of this year on high international prices.

Corn futures settled lower.

 

The benchmark May 2008 contract settled RMB5 lower at RMB1,655/tonne.

 

Total trading volume for corn futures declined to 343,832 lots from 434,792 lots Thursday.