November 19, 2007

 

Monday: China soybean futures settle down; cash prices expected to fall

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly lower Monday, as market players anticipate lower cash prices because the government could introduce policies to curb price gains.

 

However, the benchmark September 2008 soybean contract settled RMB6 higher at RMB4,546 a metric tonne.

 

Total trading volume declined to 575,508 lots from 971,498 lots Friday.

 

One lot is equivalent to 10 tonnes.

 

A rise in food prices is the main cause of China's high consumer price index growth, which rebounded to 6.5% in October, matching August's almost 11-year high.

 

China's rising agricultural product prices aren't due to a supply shortage, the Ministry of Agriculture said Friday, attributing the higher prices to international prices and rising raw material costs.

 

It said the country "can guarantee the market supply."

 

However, analysts said the fall in futures prices of agricultural products could be brief as demand for oilseeds and vegetable oil will remain high ahead of year-end holidays.

 

"Soybean imports will be increasing towards the Chinese New Year (in early February)," said Xia Tian, an analyst at Yongan Futures.

 

Chinese companies have booked 14-16 cargoes of soybean import shipments in the previous week, up from around 11 cargoes in the preceding week, said an analyst report by Shanghai JCI late Friday.

 

Chinese private and state-run companies have stepped up soybean imports in the international market to ease the rise in edible oil prices in China.

 

Palm oil futures and soyoil futures settled lower.

 

The benchmark May 2008 palm oil contract settled at RMB8,700/tonne, down RMB120/tonne from Friday.

 

Total trading volume for all palm oil futures rose to 13,308 lots from 8,560 lots Friday.

 

The benchmark May 2008 soyoil contract settled RMB122 lower at RMB9,376/tonne.

 

Soymeal futures settled mixed.

 

The benchmark May 2008 soymeal contract settled RMB1 lower at RMB3,526/tonne.

 

Corn futures settled mostly lower.

 

The benchmark May 2008 contract settled RMB5 lower at RMB1,752/tonne.

 

Total trading volume for all corn futures declined to 572,508 lots from 923,440 lots Friday.