October 28, 2008
Tuesday: China soybean futures settle up on rise in Asian stock markets
China's soybean futures traded on the Dalian Commodity Exchange settled sharply higher Tuesday, boosted by a major rise in Asian stock markets.
The benchmark May 2009 soybean contract settled RMB91 higher at RMB3,266 a metric tonne, or up 2.9%. The contract briefly touched limit-up towards the closing bell.
Traders found an excuse to buy in the oversold agricultural commodities market, as sentiment was somewhat helped by the surge in major Asian stocks, said Wang Xiaoguang, an analyst at Galaxy Futures.
Tokyo stocks closed sharply higher Tuesday, gaining 6.4% on Monday and reversing earlier losses that sent the key Nikkei index falling below the 7,000 mark for the first time in 26 years.
The Hang Seng Index also rose 13.6% to regain the 12,500 level.
But analysts said the rise in soybeans could be brief as the falling open interest shows the market is still concerned about the overall economy.
The open interest in all soybean contracts fell 61,178 lots to 596,022 lots Tuesday.
Trading volume fell to 1,588,676 lots from 1,882,292 lots Monday.
The market was mostly pushed up by short-covering, while traders dare not set up new long positions heavily as the rebound doesn't mean a bottom has been seen, said Shen Enxian, an analyst at China International Futures Co.
The market is also cautious ahead of a revised crop report from the U.S. Department of Agriculture.
The USDA is scheduled to publish a "corrected" version of its Oct. 10 crop production report at 8:30 a.m. EDT Tuesday.
Much speculation centers on the possibility of USDA making further revisions in its estimate of U.S. soybean acreage.
Although the rise in the market reflected the expectations of many of a soybean acreage cut, the USDA report may give the market a "surprise," said Shen.
Corn, soybean meal and soybean oil futures settled higher, while palm oil futures settled mixed, with the benchmark palm oil contract settling slightly higher.
Tuesday's settlement prices in yuan a metric tonne for benchmark contracts and volume for all contracts in lots (one lot is equivalent to 10 tonnes):
Contract Settlement Price Change Volume
Soybean May 2009 3,266 Up 91 1,588,676
Corn May 2009 1,658 Up 13 301,624
Soymeal Jan 2009 2,828 Up 96 627,360
Palm Oil Jan 2009 4,416 Up 2 139,754
Soyoil Jan 2009 6,126 Up 94 691,432