March 27, 2008

 

Thursday: China soybean futures settle down amid Global fincl market woes

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Thursday despite positive factors, including an ongoing strike by farmers in Argentina and tight global vegetable oil supply.

 

The benchmark January 2009 soybean contract settled RMB45 lower at RMB4,249 a metric tonne after trading between RMB4,201 and RMB4,268/tonne.

 

"The market has digested this bullish news" amid cautiousness, said Duan Yujie, a manager at Changjiang Futures.

 

Investors are reluctant to buy actively after earlier big fluctuations in agricultural products prices, and there are few signs that the upward correction will last long.

 

The overall environment is not good for commodities markets, as sentiment remains negative in global financial markets, said an analyst at consultancy Shanghai JCI.

 

Farmers in North America and China will start spring soybean planting in April, and uncertainties about acreage are keeping traders on the sidelines.

 

A surge in soybean prices since late last year due to reduced soybean output in China is likely to encourage farmers to grow more soybeans this year at the expense of corn.

 

The U.S. Department of Agriculture is scheduled to release its prospective plantings report for the 2008-09 marketing year Monday, which will be key in deciding the fundamentals of major agricultural products.

 

A stronger yuan against the dollar also pushed domestic soybean prices lower.

 

Analysts say it will take time for market sentiment to recover before agricultural products prices can test new highs.

 

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

 

The market is concerned that the strike in Argentina, a major soybean producing country, may shift demand for soyoil to palm oil.

 

Corn futures settled nearly unchanged.

 

Thursday's settlement prices in yuan a metric tonne and the volume for all contracts in lots (One lot is equivalent to 10 tonnes):

 

               Contract     Settlement Price  Change     Volume

Soybean  Jan 2009      4,249         Dn     45        831,530

Corn       Sep 2008      1,773         Dn     5          495,618

Soymeal  Sep 2008      3,297         Dn    32        317,878

Palm Oil  May 2008     10,638         Up    60         65,220

Soyoil     Sep 2008     10,930         Dn   144        495,202