November 13, 2007
Tuesday: China soybean futures settle mixed; more upside on less output
Soybean futures traded on the Dalian Commodity Exchange settled mixed Tuesday, pressured by overnight losses in Chicago Board of Trade soybean futures, while analysts expect more upside in the coming days.
"Given higher cash prices than futures prices and the expectation of less output this year, soybean has plenty of upside," said Zeng Xuezhou, an analyst at Beite Futures Co.
The benchmark May 2008 soybean contract settled RMB9 lower at RMB4,504 a metric tonne, after trading between RMB4,480/tonne and RMB4,529/tonne.
Total trading volume rose to 807,418 lots from 784,428 lots Monday. One lot is equivalent to 10 tonnes.
Soybean futures opened lower in the session following CBOT soybean losses, but bargain hunting in expectation of higher prices drove some contracts back to positive territory in the late afternoon session, traders said.
"In the short term, soybean is likely to be affected by the volatility in other commodities such as crude oil and gold, but its strong fundamentals will underpin prices," Zeng said.
China's National Development and Reform Commission said on its Web site Tuesday that its latest survey in seven provinces showed average per-hectare yield fell by 20% due to drought and floods.
It didn't give forecast for the total production.
Soymeal and soyoil futures settled higher. The benchmark May soymeal contract rose RMB15 to settle at RMB3,423/tonne. The benchmark May 2008 soyoil contract settled RMB46 higher at RMB9,450/tonne.
Corn futures settled lower a tad. The benchmark May 2008 contract fell RMB8 to settle at RMB1,768/tonne.
"Corn certainly doesn't have fundamentals as strong as that of soybean now, but farmers might want to grow more soybean next year due to high prices. Smaller corn acreage is the underlying support to prices," Zeng said.
Palm oil futures settled mixed in thin trade. The benchmark May 2008 contract settled RMB4 lower at RMB8,848/tonne.
