March 3, 2008
Monday: China soybean, soyoil, palm oil futures settle at new records
Soybean futures traded on the Dalian Commodity Exchange settled at new records Monday, driven by surging vegetable oil prices.
The benchmark January 2009 soybean contract settled RMB142 higher at 4,924 a metric tonne.
"It's a market completely driven by capital, not fundamentals," said Gao Yanrong, an analyst at Dalu Futures, warning that the risks of fluctuation are increasing as investors may take profits at any time given the market's recent sustained surge. He added, however, it is difficult to forecast at which point investors will move to take profits.
China will definitely import more vegetable oil than last year, as reduced rapeseed oil output and increasing consumption along with the coming Olympics will boost demand, but increased imports haven't yet been realized.
China imported 150,732 tonnes of soyoil in January, down 20.3% on year, according to data issued by the General Administration of Customs Friday.
The country only imported around 560,000 tonnes of vegetable oil of all kinds in January, down 9% on year.
China may increase imports of major agricultural products to meet rising demand and tame inflation, Minister for Commerce Chen Deming said Monday.
Rising prices have curbed demand so far, but this only means China will have to import more edible oils later, at even higher prices, said Dong Shuangwei at Capital Futures.
Dong said relatively dry weather associated with La Nina may become a factor that could threaten the autumn harvest. China's plans boost oilseed output in 2008 were disrupted in January and February as snow storms damaged an estimated 40% of the spring rapeseed crop.
Palm oil futures and soyoil futures settled at record highs again Monday, with most contracts reaching limit-up during the session.
Soymeal futures and corn futures also settled higher.
Monday's settlement prices in yuan a metric tonne and volume for all contracts in lots (One lot is equivalent to 10 tonnes):
Contract Settlement Price Change Volume
Soybean Jan 2009 4,924 Up 142 839,212
Corn Sep 2008 1,856 Up 50 1,442,476
Soymeal Sep 2008 3,712 Up 112 861,518
Palm Oil May 2008 12,494 Up 462 5,466
Soyoil Sep 2008 14,080 Up 470 230,178