December 4, 2007
Tuesday: China soybean futures settle mixed on rising supply; corn down
Soybean futures traded on the Dalian Commodity Exchange settled mixed Tuesday, with long position holders continuing to unwind in anticipation of rising supplies of imports in the domestic market.
Analysts said the bull run in soy futures is losing steam, at least for now, as the central government is determined to control rising domestic food prices.
The benchmark September 2008 soybean contract settled RMB30 higher at RMB4,301 a metric tonne after trading between RMB4,276 and RMB4,327/tonne.
Total trading volume fell to 695,814 lots from 761,190 lots Monday. One lot is equivalent to 10 tonnes.
"Longs are retreating from soybeans, given the rising amount of imports and the government's repetitive emphasis on stabilizing food prices," said Dong Liang, an analyst at Shanghai Jiuheng Futures.
"Soy futures will probably consolidate for a while, after longs lock in their profits," Dong said.
Soymeal futures settled lower along with soybeans, but soyoil futures settled higher.
Corn futures settled mostly a tad lower, and analysts said they may soften a bit in the short term.
"I think people are concerned with tomorrow's government auction of 3.5 million tonnes of wheat; this is likely to have a spillover effect on corn," said a corn trader in Beijing.
A total of 3.5 million tonnes of wheat from state reserves bought under the minimum purchase price program will be auction Wednesday.
"This is a huge amount, and you can't rule out the possibility that corn will be substituted with wheat, which is quite economical at the moment," he added.
Tuesday's settlement prices in yuan a metric tonne and volume for all contracts in lots:
Contract Price Change Volume
Soybeans Sep 2008 4,301 Up 30 695,814
Soymeal May 2008 3,219 Dn 12 1,126,462
Soyoil May 2008 9,390 Up 78 104,172
Corn May 2008 1,760 Dn 2 579,768
Palm Oil May 2008 8,568 Up 28 22,890
