November 8, 2007

 

Thursday: China soybean futures settle down; correction after strong gain

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Thursday on a technical correction after recent strong gains.

 

The benchmark May 2008 soybean contract settled RMB19 lower at RMB4,511 a metric tonne.

 

Total trading volume declined to 668,658 lots from 1,081,656 lots Wednesday.

 

One lot is equivalent to 10 tonnes.

 

One local analyst said the decline had been expected, but that it would be short-lived.

 

"The correction (of agricultural products) could have happened at any time, but the degree won't be large," the analyst said.

 

Overall inflation, high crude oil prices and rising demand are nevertheless supporting strong fundamentals for grains and vegetable oils.

 

Palm oil futures contracts settled mixed, supported by record high crude palm oil prices at Bursa Malaysia Derivatives, and soyoil futures settled mostly higher.

 

The benchmark May 2008 palm oil contract settled at RMB8,846/tonne, up RMB30/tonne from Wednesday.

 

Total trading volume for all palm oil futures rose to 5,138 lots from 4,584 lots Wednesday.

 

The benchmark May 2008 soyoil contract settled RMB38 higher at RMB9,254/tonne.

 

Global edible oil prices are expected to remain high in 2008 because recent price increases haven't damped demand, while a likely decline in oilseed acreage and uncertainty over the weather in Brazil's soybean producing region offer support, influential vegetable oil analyst Dorab Mistry, said Thursday.

 

Soymeal futures settled mostly lower.

 

The benchmark May 2008 soymeal contract settled RMB22 lower at RMB3,352/tonne.

 

Corn futures settled lower, with the benchmark May 2008 contract settling RMB6 down at RMB1,767/tonne.

 

Total trading volume for all corn futures declined to 517,820 lots from 857,212 lots Wednesday.