November 5, 2008
Wednesday: China soybean futures settle up on CBOT rise; more upside
Soybean futures traded on the Dalian Commodity Exchange settled higher slightly Wednesday, tracking overnight gains in soybeans on the Chicago Board of Trade, and analysts foresee further upside on state plans to buy for reserves.
The benchmark January 2009 soybean contract settled RMB13 higher at RMB3,361 a metric tonne, after trading between RMB3,336/tonne and RMB3,399/tonne.
"Fundamentally speaking, the demand side isn't good, but futures were oversold in last month's slump, so such a rally can be expected," said Li Honglei, an analyst at Nanhua Futures.
The government's buying plan is also underpinning futures prices by supporting the cash market.
Futures will probably have further upside, given the state purchase price at RMB3,700/tonne, he said.
Soyoil futures settled higher on gains in soybean and stockpiling ahead of the festivals, traders said.
Firms have already begun stocking for the Chinese New Year, one of the most important festivals of the year, which in 2009 will fall in late January.
Soymeal futures, however, settled lower, weighed down by sagging demand in the feedmeal sector.
Corn futures settled little changed.
Cash prices in China's major producing regions in the northeast have fallen slightly in the past week on rising supply from the new harvest and subdued buying interest.
"The problem is that the warehouses which are supposed to buy for state reserves haven't received bank loans to start buying, while the new harvest keeps coming onto the market," said a trader in Jilin province.
"That will be something we'll look at to get an idea of how prices will change in the next few weeks," he said.
Wednesday's settlement prices in yuan a metric tonne and volume for all contracts in lots:
Contract settlement Price Change Volume
Soybeans May 2009 3,361 Up 13 1,083,016
Corn May 2009 1,632 Dn 3 179,400
Soymeal Jan 2009 2,576 Dn 19 1,299,812
Palm Oil Jan 2009 4,900 Up 158 87,214
Soyoil Jan 2009 6,780 Up 144 727,730