November 12, 2008
Wednesday: China soybean futures settle down on fall in CBOT; corn lower
Soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday, weighed by overnight losses in its Chicago Board of Trade counterpart.
The benchmark May 2009 soybean contract settled RMB29 lower at RMB3,264 a metric tonne, after trading between RMB3,229/tonne and RMB3,292/tonne.
"I've seen the lack of confidence competing with high hopes of the government's buying plan in today's session," said Gao Yanrong, an analyst at Dalu Futures.
Analysts said market participants' views on the market outlook differed, with some placing hopes on the government's buying plans while the overall pessimism of the others overshadowed. Such divergence is likely to feature in the movement of prices for the next couple of days at least, Gao said.
Soybean futures prices have fallen by more than a third since July, and the Chinese government, late last month, rolled out a state-reserve buying plan to support prices.
"This prevented shorts to sell aggressively, but on the other hand, the current financial market situation doesn't allow a strong rally," Gao said.
The China National Grain and Oils Information Center cut its forecast in its monthly report Wednesday of the country's soybean output this year by 1 million tonnes to 16.50 million tonnes, due to a unit yield cut.
Soymeal futures settled up slightly, while soyoil futures settled down after Nymex crude oil futures settled below US$60/bl overnight.
Corn futures settled lower as well.
"With processors located in the major production region in the northeast buying on a hand-to-mouth basis, cash prices were weighed," said an analyst in Beijing.
Prices of corn likely to find support around RMB1,500/tonne, the purchase price set by the government for the state reserves, but any further upside can be very difficult, given the weak demand, he said.
Wednesday's settlement prices in yuan a metric tonne and volume for all contracts in lots:
Soybeans May 2009 3,264 Dn 29 810,638
Corn May 2009 1,604 Dn 11 428,064
Soymeal Jan 2009 2,540 Up 19 1,001,150
Palm Oil Jan 2009 4,636 Dn 182 111,878
Soyoil Jan 2009 6,486 Dn 186 503,574