December 17, 2007
Monday: China soybean futures settle up on record CBOT prices; corn up
Soybean futures traded on the Dalian Commodity Exchange settled higher Monday, as the Chicago Board of Trade soybean futures hit new contract highs Friday, analysts said.
The benchmark September 2008 soybean contract settled at RMB4,526 a metric tonne, up 1.2% from Friday's settlement.
"The gains were largely because of strong CBOT soybean futures Friday, although recent arrivals of large amount of imports have kept us lagging from CBOT gains," said an analyst at an international grains trading firm in Beijing.
Now that the new policies are out, "it's very likely to see that (domestic) futures to be pressured by the announcement, and a downward correction because of this isn't unlikely in the next couple of days," said Gao Yanrong, an analyst at Dalu Futures Co.
China's Ministry of Finance said Monday after the markets are closed that the value-added tax rebates on exports of soybeans, corn, wheat, rice and their products will be canceled effective Thursday.
Soymeal and soyoil futures also settled higher, with the benchmark May 2008 soyoil contract hitting a new contract high at RMB9,816/tonne.
Corn futures settled up a tad on spillover strength from soy futures, analysts said.
However, the cancelation of tax rebate on corn exports "is really bad news for corn, both in terms of fundamentals and market sentiment," said an analyst with a major grains trading firm in Beijing.
With more domestic supply and sluggish demand for feedmeal, corn prices will probably be weighed, he said.
Monday's settlement prices in yuan a metric tonne and volume for all contracts in lots:
Contract Price Change Volume
Soybeans Sep 2008 4,526 Up 52 412,750
Soymeal May 2008 3,414 Up 51 945,788
Soyoil May 2008 9,770 Up 118 95,564
Corn May 2008 1,755 Up 19 853,096
Palm Oil May 2008 8,776 Up 74 11,670
