November 15, 2007

 

Thursday: China soybean futures settle up; but face downward pressure

 

 

Soybean futures traded on the Dalian Commodity Exchange settled higher Thursday, but the market may see a downward correction in the near term as prices have risen too much, traders said.

 

The benchmark September 2008 soybean contract settled RMB52 higher at 4,564 a metric tonne.

 

Total trading volume declined to 973,058 lots from 1,027,866 lots Wednesday.

 

One lot is equivalent to 10 tonnes.

 

China is importing more soybeans this week than recent weeks, showing demand is strong, said Shanghai JCI, a grain consultancy firm.

 

Industry sources said China imported 500,000 tonnes of duty-free soybeans last week for its state reserves, and the country will import another 1 million-1.5 million tonnes by the end of the year.

 

However, the recent rise in soybean prices has been overly strong, supported by a domestic output cut, and the market may face a downward correction in the near term, said Zou Moujie, an analyst with Jingyi Futures Co.

 

He added the market is concerned more measures may be taken by the government to cool prices.

 

China's State Council, the country's Cabinet, said Wednesday it will take further measures to ensure basic price stability and supply, which is likely to fuel expectations of another tightening move in the coming days.

 

The statement comes after consumer price index data for October hit 6.5%, matching August's 11-year high for the key inflation measure.

 

Palm oil futures and soyoil futures settled mostly higher.

 

The benchmark May 2008 palm oil contract settled at RMB8,926/tonne, up RMB22/tonne from Wednesday.

 

Total trading volume for all palm oil futures rose to 7,100 lots from 5,576 lots Wednesday.

 

The benchmark May 2008 soyoil contract settled RMB62 higher at RMB9,666/tonne.

 

Soymeal futures settled up.

 

The benchmark May 2008 soymeal contract settled RMB20 higher at RMB3,506/tonne.

 

Corn futures settled mostly higher.

 

The benchmark May 2008 contract settled RMB3 lower at RMB1,777/tonne.

 

Total trading volume for all corn futures rose to 772,482 lots from 644,120 lots Wednesday.