November 7, 2007
Wednesday: China soybean futures settle at new highs; output forecast down
Soybean futures traded on the Dalian Commodity Exchange settled at record highs Wednesday, after the country's think tank lowered its production forecast for 2007 yet again.
The benchmark May 2008 soybean contract settled RMB68 higher at RMB4,530 a metric tonne.
Total trading volume rose to 1,081,656 lots from 673,660 lots Tuesday.
One lot is equivalent to 10 tonnes.
The China National Grain and Oils Information Center Wednesday lowered its 2007 soybean output forecast by 400,000 metric tonnes from last month to 14 million tonnes, citing a reduction in acreage forecast.
State-backed CNGOIC also said corn output is estimated to total 148 million tonnes, down 1 million tonnes from its estimate last month.
CNGOIC's forecast is still the highest among market estimates, and the output cut has sent soybean cash prices to above RMB4,000/tonne, compared with around RMB2,500 at the start of this year.
Record high crude oil prices, biofuel demand and flush liquidity in the financial market are providing strong support for agricultural products.
However, Wu Weijun, investment manager at Huixin Futures, said prices for most agricultural products haven't reached historical highs, and still have room to rise further.
Palm oil futures contracts settled higher on record high crude oil prices.
The benchmark May 2008 palm oil contract settled at RMB8,816/tonne, up RMB188/tonne from Tuesday.
Total trading volume for all palm oil futures rose to 4,584 lots from 3,980 lots Tuesday.
Soymeal futures and soyoil futures settled higher.
The benchmark May 2008 soymeal contract settled RMB55 higher at RMB3,374/tonne, and the benchmark May 2008 soyoil contract settled RMB200 higher at RMB9,216/tonne.
Corn futures also settled higher, with the benchmark May 2008 contract settling RMB10 higher at RMB1,773/tonne.
Total trading volume for corn futures declined to 857,212 lots from 859,488 lots Tuesday.
