December 5, 2007

 

Wednesday: China soybean futures settle up on CBOT gains; corn steady

 

 

Soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday on overnight gains in Chicago Board of Trade soybeans.

 

The benchmark September 2008 soybean contract settled RMB21 higher at RMB4,322 a metric tonne after trading between RMB4,304 and RMB4,343/tonne.

 

Total trading volume shrank further to 495,280 lots from 695,814 lots Tuesday. One lot is equivalent to 10 tonnes.

 

"Soy futures, before early February, will find it difficult to gain the momentum for a strong rally again, given the (government) policy concerns," said analyst Zeng Xuezhou with Beite Futures Co.

 

Speculators know that this isn't a good time to drive prices higher, as a few government meetings at the year-end will emphasize again and again their intention to curb rising food prices, Zeng said.

 

"With arrivals of imports rising, soybeans are vulnerable to a downward correction, which may find support around RMB4,100/tonne," he said.

 

Corn futures settled little changed, amid concerns that the government's wheat auction Wednesday will trigger more use of wheat as a substitute for corn and therefore potentially damp corn prices.

 

The National Development and Reform Commission said Wednesday on its Web site that with sufficient domestic supply of grains, prices will be able to stabilize next year.

 

Wednesday's settlement prices in yuan a metric tonne and volume for all contracts in lots:

 

                  Contract       Price       Change     Volume

Soybeans    Sep 2008      4,322       Up  21     495,280

Soymeal      May 2008      3,243      Up  24    1,186,172

Soyoil         May 2008      9,378       Dn  12     84,234

Corn           May 2008      1,761       Up   1     459,948

Palm Oil      May 2008      8,560       Dn   8     18,920