October 9, 2007

 

Tuesday: China soybean futures settle mostly up on strong cash prices

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Tuesday on strong cash prices for the new crop.

 

The benchmark May 2008 soybean contract settled RMB9 higher at RMB4,085 a metric tonne.

 

Total trading volume declined to 611,230 lots from 713,214 lots Monday. One lot is equivalent to 10 tonnes.

 

"The cash prices of (new soybeans) in northeast China are too strong," and soybean futures are likely to set new highs when the market's focus turns back to excess (cash) liquidity again, said Gu Jianjun, an analyst at Jinyuan Futures.

 

During the seven-day holiday break, purchase prices of newly-harvested soybeans in the major producing region of Heilongjiang province were between RMB3,500-RMB3,800/tonne, RMB40-RMB200/tonne higher than pre-holiday levels.

 

Meanwhile, China's soybean output will definitely be lower than that of last year, due to reduced acreage and an earlier drought.

 

While purchase costs for traders were very high, they won't sell the soybeans at low prices, said Jilin Grain Market in an article published on its Web site Tuesday.

 

It expects soybean cash prices to rise further to above RMB5,000/tonne if soybean output this year declines by 30% from a year earlier as the market has been expecting.

 

China's soybean output in 2006 totaled 15.97 million tonnes, according to data from the China National Grain and Oils Information Center.

 

Soymeal futures settled lower, but soyoil futures settled mostly higher.

 

The benchmark May 2008 soymeal contract settled RMB29 lower at RMB3,088/tonne and the benchmark May 2008 soyoil contract settled RMB36 higher at RMB8,368/tonne.

 

Corn futures settled mostly higher.

 

The benchmark May 2008 contract settled up RMB9 at RMB1,664/tonne.

 

Total trading volume for all corn futures rose to 555,394 lots from 487,668 lots Monday.