July 3, 2008

 

Thursday: China soybean futures settle sharply down on concern over CBOT

 

 

Soybean futures traded on the Dalian Commodity Exchange settled sharply lower Thursday on concern over likely profit-taking on the Chicago Board of Trade tonight.

 

The benchmark January 2009 soybean contract settled RMB95 lower at RMB5,110/tonne after trading between RMB4,980-RMB5,241/tonne.

 

The old crop contract for September 2008 settled RMB61 lower at RMB5,760/tonne.

 

The benchmark contract opened slightly higher but quickly descended into negative territory, falling sharply and remaining there for the rest of the session.

 

"(Friday) will be the Independence Day holiday for the U.S market, and CBOT is likely to take profits ahead of the long weekend following the recent big gains," said Liu Xinghua, an analyst at Great Wall Futures Co.

 

But he added the domestic technical correction will be short-term, as there are no signs that CBOT will see a reversal in its upward trend soon.

 

However, some other analysts said the fundamentals don't support such high soybean prices on CBOT, with July soybeans settling 17 3/4 cents higher at US$16.45 3/4 per bushel overnight.

 

The U.S. Department of Agriculture's acreage and quarterly grain stocks forecasts released earlier this week were actually negative for the market, with the forecasts being above the average of trade estimates.

 

Meanwhile, in the end, Argentina soybeans will be exported even though a strike by farmers there has blocked shipments, said Capital Futures' analyst Dong Shuangwei, adding overall sentiment toward agricultural products in China is sluggish due to weak demand.

 

Some traders also said there is a rumor that the China Securities Regulatory Commission has warned some big futures brokerages over their embezzlement of customers' margin fees for trading, which triggered the covering of long positions.

 

Soyoil futures, palm oil futures and soymeal futures settled lower, while corn futures settled little changed.

 

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

Soybeans          Jan 2009           5,110           Dn  95          786,686

Corn                 Jan 2009           1,929        Unchanged       576,128

Soymeal           Jan 2009            4,120          Dn  50        1,399,488

Palm Oil           Sep 2008          10,600          Dn 220            24,856

Soyoil               Jan 2009          11,896          Dn 324          295,840