December 30, 2008
Soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday, as the market lost upward momentum after a recent rise.
The benchmark May 2009 soybean contract settled RMB29 lower at RMB3,374 a metric tonne.
"There was more room for declines after the recent rise, as some traders weren't willing to chase the market higher due to concern over another round of falls amid the bear market," said Gao Yanrong, an analyst at Dalu Futures Co.
Some speculative funds have been entering the market to seek bargains, as they think the bottom is near following an earlier panic selloff caused by the global financial crisis.
The funds have been swift in entering and exiting the market, creating some volatility, said analysts.
As the financial crisis hasn't deteriorated further for now, traders are looking for fundamentals that usually affect agricultural commodities, said Tianqi Futures in its note.
As a result, dryness in Argentina's major producing areas and strong demand from China ahead of the Chinese New Year holiday both helped support the market somewhat, it said.
Analysts expect the market to consolidate Wednesday, the last trading session before the New Year holiday.
Open interest for all soybean contracts fell 32,002 lots to 380,858 lots.
Trading volume declined to 691,192 lots from 854,460 lots Monday.
Corn futures settled slightly lower, while soymeal futures settled slightly higher.
Soyoil futures and palm oil futures settled lower.
Soymeal futures have been leading the market's rise recently, after the government announced the soymeal import tax will be adjusted back to 5% from 2% starting from Jan. 1.
Meanwhile, limited soymeal stocks and higher demand ahead of the year-end holidays also helped support soymeal prices, said analysts.
Tuesday's settlement prices in yuan a metric tonne for benchmark contracts and the volume for all contracts in lots (One lot is equivalent to 10 tonnes):
Contract Settlement Price Change Volume
Soybean May 2009 3,374 Dn 29 691,192
Corn May 2009 1,537 Dn 2 167,652
Soymeal May 2009 2,431 Up 12 435,412
Palm Oil May 2009 5,118 Dn 46 192,152
Soyoil May 2009 6,174 Dn 62 251,190