November 1, 2007

 

Thursday: China soybean futures settle mostly up on surging cash prices

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Thursday on surging soybean cash prices.

 

The benchmark May 2008 soybean contract settled RMB23 higher at 4,406 a metric tonne.

 

Total trading volume declined to 901,018 lots from 999,072 lots Wednesday.

 

One lot is equivalent to 10 tonnes.

 

The soybean purchase prices offered by soyoil processing plants are between RMB3,900-RMB4,100/tonne in major soybean producing Heilongjiang province, up RMB60-RMB100/tonne from earlier this week.

 

Based on the high prices, the cost of soybean to be delivered in May next year will be above RMB4,500/tonne, meaning there is a lot room for soybean futures prices to rise, said Zhao Qiang, the research manager at Tianqi Futures.

 

Rising soyoil demand and reduced domestic soybean output this year are the major reasons for soaring soybean prices.

 

Zhao expected soybean output in Heilongjiang province this year to be around 5 million tonnes, down from 7.5-8 million tonnes in 2006, reducing national soybean output to below 14 million tonnes.

 

China's newly-listed palm oil futures contracts settled higher on record high crude oil prices, which broke through $95 a barrel.

 

The benchmark May 2008 palm oil contract settled at RMB8,606/tonne, up RMB76/tonne from Wednesday.

 

Analysts said the shortage in soyoil supply will support palm oil demand, despite weak consumption for palm oil in the coming winter.

 

Total trading volume for all palm oil futures declined to 4,002 lots from 6,334 lots Wednesday.

 

Soymeal futures settled mixed and soyoil futures settled higher.

 

The benchmark May 2008 soymeal contract settled RMB2 higher at RMB3,334/tonne, and the benchmark May 2008 soyoil contract settled RMB80 higher at RMB8,946/tonne.

 

China's move to raise oil product prices by about 10% will have an upward psychological impact on commodities prices as higher inflation may boost overall prices, said an analyst with a foreign trading house.

 

The National Development and Reform Commission said the fuel price hikes taking effect Thursday will likely add a 0.05 percentage point to the on-year increase in the monthly consumer price index.

 

China's consumer price index growth reached 6.2% in September, a rate tad slower than 6.5% in August.

 

Corn futures settled mostly higher.

 

The benchmark May 2008 contract settled RMB11 higher at RMB1,717/tonne.

 

Total trading volume for all corn futures declined to 615,316 lots from 993,338 lots Wednesday.