December 12, 2007

 

Wednesday: China soybean futures settle down despite CBOT new high

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday in a technical correction, although soybean at the Chicago Board of Trade set new contract highs overnight.

 

The benchmark September 2008 soybean contract settled RMB29 lower at 4,428 a metric tonne.

 

Total trading volume declined to 656,704 lots from 883,496 lots Tuesday.

 

One lot is equivalent to 10 tonnes.

 

Analysts said domestic soybean futures have performed strongly recently, and now it's time for them to take a breath before testing earlier highs.

 

A record high in consumer price index growth provided the impetus for the correction.

 

China's consumer price index in November rose 6.9% from the same month last year, driven by an 18.2% rise in food prices, the National Bureau of Statistics said Tuesday.

 

Growth in the key inflation gauge, at an 11-year high, was higher than 6.5% growth recorded in October.

 

The government has been reiterating that it will work hard to prevent widespread inflation and has increased the supply of grains, including corn, recently.

 

Huang Xiao, a manager at Capital Futures, said strong demand for soybean will continue to push soybean prices higher and any correction will be brief.

 

U.S. soybean exports were raised 20 million bushels based on stronger-than-expected sales to China, the U.S. Department of Agriculture reported overnight.

 

Palm oil futures and soyoil futures settled mostly lower, while soymeal futures and corn futures settled lower.

 

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

 

                Contract     Settlement Price  Change     Volume

Soybean   Sep 2008      4,428         Dn     29          656,704

Corn         May 2008      1,735         Dn    14          343,924

Soymeal   May 2008      3,411         Dn     21        1,177,682

Palm Oil    May 2008      8,534         Dn      8           22,376

Soyoil       May 2008      9,490         Dn     38          66,302