November 29, 2007

 

Thursday: China soybean futures settle down on forecasts of more supply

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Thursday as the market raised its supply expectations for next year.

 

The benchmark September 2008 soybean contract settled RMB45 lower at 4,335 a metric tonne.

 

Total trading volume rose to 1,166,736 lots from 740,688 lots Wednesday.

 

One lot is equivalent to 10 tonnes.

 

A previous price surge due to concerns of reduced output this year was overdone, and supply will increase next year as global acreage expands, said Fu Jianjun, an analyst at Miracle China Futures Brokeage.

 

The market expects the government to gradually strengthen macro controls to curb rising food prices, issuing more measures at a faster pace.

 

China will sell at least 2 million metric tonnes of corn from state reserves to stabilize domestic feedmeal prices, the China National Grain & Oils Information Center said Thursday.

 

The government will ask China Grain Reserves Corp. to sell the corn in non-producing regions in southern China, Hebei province, Shandong province and Henan province soon, it said.

 

Agricultural Development Bank of China will also issue new measures to urge enterprises to speed up the sale of corn reserves to pay back their loans, according to information center.

 

As well as selling corn, China also sold 2.32 million tonnes of wheat it bought under the minimum purchase price program last year, or 94.3% of the 2.46 million tonnes it planned to sell.

 

Both the planned volume and settlement ratio are record highs.

 

Palm oil futures settled lower, but soyoil futures settled mostly higher.

 

The benchmark May 2008 palm oil contract settled at RMB8,524/tonne, down RMB64/tonne from Monday.

 

Total trading volume for all palm oil futures declined to 22,326 lots from 24,282 lots Wednesday.

 

The benchmark May 2008 soyoil contract settled RMB6 higher at RMB9,348/tonne.

 

Soymeal futures settled lower.

 

The benchmark May 2008 soymeal contract settled RMB36 lower at RMB3,334/tonne.

 

Corn futures settled mostly lower.

 

The benchmark May 2008 contract settled RMB8 lower at RMB1,774/tonne.

 

Total trading volume for all corn futures declined to 791,388 lots from 1,189,012 lots Wednesday.