December 25, 2007

 

Tuesday: China soybean futures settle down; await further direction

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday, as the market took a breather due to the government's measures to keep surging prices in check.

 

The benchmark September 2008 soybean contract settled RMB2 lower at 4,507 a metric tonne.

 

One lot is equivalent to 10 tonnes.

 

The government launched a series of policies recently to prevent a surge in domestic prices ahead of the Chinese New Year.

 

China canceled the value-added tax rebates on exports of wheat, corn, rice, soybeans and flour made from the products on Dec. 20.

 

It will also extend to March 31 a cut in the soybean import tariff to 1% to guarantee the domestic supply of edible oil.

 

China cut the soybean import tariff to 1% from 3% for October-December to keep volatile domestic prices in check.

 

These moves came after China's consumer price index hit an 11-year high in November, driven by rapid growth in grain and food prices.

 

"The market now looks at the government's (behavior) for further direction, and there is unlikely to be any big moves ahead of the new year," said Gao Yanrong, an analyst at Dalu Futures Co.

 

However, vegetable oil futures went higher in expectations of strong demand ahead of the holidays.

 

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

 

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

 

                Contract   Settlement    Price  Change     Volume

Soybean   Sep 2008      4,507         Dn      2           365,334

Corn         May 2008      1,716         Dn      6           206,784

Soymeal   Sep 2008      3,315          Dn     21          781,266

Palm Oil    May 2008      8,994         Up      52          17,084

Soyoil       May 2008      9,946         Up      48          106,132