October 8, 2007

 

Monday: China soybean futures settle down on CBOT, dwindling demand

 

 

Soybean futures traded on the Dalian Commodity Exchange tumbled Monday, after their counterparts at Chicago Board of Trade saw big corrections during China's week-long National Day holidays.

 

The benchmark May 2008 soybean contract settled RMB127 lower at RMB4,076 a metric tonne.

 

Total trading volume declined to 713,214 lots from 923,078 lots Sept. 28, the last trading session before the holiday break.

 

One lot is equivalent to 10 tonnes.

 

Dwindling demand after the National Day holidays and high prices of agricultural products will likely put pressure on the soybean contracts in the short term, said analysts.

 

But price downside is limited for soybeans and soy products, due to higher new soybean purchase prices, said Li Honglei, an analyst at Nanhua Futures Co, adding that soybean futures may consolidate in the coming weeks.

 

Concerns over a poor harvest in major soybean producing regions due to a drought this year also pushed soybean prices higher.

 

Although think tank China National Grain and Oils Information Center kept the country's 2007 soybean and corn output forecast at 14.4 million tonnes and 149 million tonnes respectively in its October report issued Monday, both unchanged from its earlier forecast, analysts expected actual figures to be much lower than these levels.

 

During the seven-day break, purchase prices of newly-harvested soybeans in key producing region Heilongjiang province were between RMB3,500-RMB3,800/tonne, RMB40-RMB200/tonne higher than the pre-holiday levels, according to data from China Edible Oil Information Network.

 

Soymeal futures and soyoil futures also tumbled.

 

The benchmark May 2008 soymeal contract settled RMB103 lower at RMB3,117/tonne, and the benchmark May 2008 soyoil contract settled RMB90 lower at RMB8,332/tonne.

 

Corn futures also settled lower, but the benchmark May 2008 contract settled unchanged at RMB1,655/tonne.

 

Total trading volume for corn futures rose to 487,668 lots from 343,832 lots Sept. 28.