November 11, 2008
Tuesday: China soybean futures settle down; USDA report fails to cheer market
China's soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday after the U.S. Department of Agriculture report issued overnight failed to boost sentiment.
Lower crude oil prices in Asian trading hours, amid renewed concerns over the health of the global economy, also pressured commodity prices.
The benchmark May 2009 soybean contract settled RMB56 lower at RMB3,293 a metric tonne, or down 1.7%.
The USDA reported 2008-09 soybean production at 2.921 billion bushels, down 17 million bushels from the October estimate of 2.938 billion bushels based on a lower yield estimate, but above the average of analysts' estimates of a crop size of 2.916 billion bushels.
The USDA forecast 2008-09 U.S. soybean ending stocks at 205 million bushels, unchanged from last month, and above the average analyst estimate of 189 million bushels.
The market was disappointed by the report and "will be consolidating lower," said a trader with a state-owned grain trader.
Although China launched a 4 trillion-yuan stimulus plan over the weekend, analysts said it was unlikely to have an immediate impact on the economy.
"As the global economy struggles with recessionary forces in the coming quarters, global commodity prices are likely to remain subdued," even with the significant fiscal stimulus by the Chinese authorities, wrote Qian Wang, an economist with JPMorgan Chase Bank, in his note.
China's soybean imports in October were at 2.13 million tonnes, according to initial data issued by the General Administration of Customs Tuesday, down 25% on year.
High soybean imports in earlier months, the weak edible oil demand and a good domestic harvest have been pressuring prices.
The open interest in all soybean contracts rose 6,730 lots to 600,126 lots Tuesday.
Trading volume rose to 750,138 lots from 737,490 lots Monday.
Corn, soybean meal, soybean oil and palm oil futures settled mostly lower.
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 3,293 Dn 56 750,138
Corn May 2009 1,615 Dn 22 445,854
Soymeal May 2009 2,521 Dn 58 787,934
Palm Oil Jan 2009 4,818 Dn 16 211,220
Soyoil Jan 2009 6,672 Dn 86 552,960