November 27, 2007

 

Tuesday: China soybean futures settle down as traders taking profits

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday as traders took profits due to a lack of supportive news.

 

The benchmark September 2008 soybean contract settled RMB59 lower at 4,429 a metric tonne.

 

Total trading volume declined to 417,552 lots from 459,088 lots Monday.

 

One lot is equivalent to 10 tonnes.

 

"There was no further supportive news and traders prefer to take profits on concerns of macro-control policies," said Yu Haifeng, an analyst at Tianqi Futures in Heilongjiang province.

 

There has been talk circulating the market that China plans to import 1.5 million-2 million tonnes of soybeans exempt from the 13% value-added tax by the end of the year to curb domestic prices.

 

Analysts said the government needs to stabilize food prices ahead of the new year, and especially Chinese New Year in early February.

 

But any price fall could be brief due to an overall soybean shortage, they added.

 

China's grain deficit will likely expand to 26 million tonnes in 2007, mostly coming from soybean, according to a report posted Tuesday on the Web site of government think-tank China's National Grain & Oil Trade Center.

 

The report said China may face a soybean shortage of 32 million tonnes in 2007-08 crop year.

 

Palm oil futures and soyoil futures settled mostly lower. The benchmark May 2008 palm oil contract settled at RMB8,720/tonne, down RMB88/tonne from Monday.

 

Total trading volume for all palm oil futures rose to 19,046 lots from 19,032 lots Monday.

 

The benchmark May 2008 soyoil contract settled RMB76 lower at RMB9,462/tonne.

 

Soymeal futures settled lower. The benchmark May 2008 soymeal contract settled RMB47 lower at RMB3,431/tonne.

 

Corn futures settled lower. The benchmark May 2008 contract settled RMB17 lower at RMB1,783/tonne.

 

Total trading volume for all corn futures rose to 902,126 lots from 854,300 lots Monday.