April 12, 2007

 

Thursday: China soybean futures settle down on South America soybean imports

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Thursday as the arrival of soybean imports from South America pressured the market.

 

The benchmark September 2007 contract settled RMB28 lower at RMB3,177 a metric tonne.

 

Total trading volume rose to 293,482 lots from 180,440 lots Wednesday. One lot is equivalent to 10 tonnes.

 

"With the arrival of South American soybeans, the domestic market is under the pressure of more supply," said Hu Xin, a trader at Tianqi Futures in Heilongjiang province.

 

He said domestic farmers are also rushing to sell their stocks to raise money for the planting season in April and May.

 

Many traders and analysts expect soybean imports in April to exceed imports in March.

 

Xu Wenjie, a trader at Tianma Futures Co., said soybean imports may be between 2.6 million to 2.7 million metric tonnes this month, compared with 2.11 million tonnes in March.

 

But he said the room for further decline in soybean futures prices could be limited, and the September 2007 contract is strongly supported at RMB3,160/tonne.

 

Soymeal futures settled lower, but soyoil futures settled mostly higher.

 

The benchmark September 2007 soymeal contract fell RMB18 to settle at RMB2,590/tonne, while the benchmark September 2007 soyoil contract settled RMB100 higher at RMB6,954/tonne.

 

As soymeal prices are sluggish due to a slow recovery in the livestock sector, the market is concerned processing plants may reduce soyoil production as a result of a large amount of soymeal stocks, thus pushing soyoil prices higher, Xu said.

 

Soymeal and soyoil are made from crushing soybeans.

 

Corn futures settled mostly lower. The benchmark September 2007 contract settled RMB14 lower at RMB1,676/tonne.

 

Trading volume for all corn contracts rose to 509,924 lots from 272,076 lots Wednesday.