July 8, 2008


Tuesday: China soymeal futures settle sharply down tracking CBOT tumble



China's soybean meal futures traded on the Dalian Commodity Exchange settled sharply lower Tuesday, tracking a fall on the Chicago Board of Trade overnight.


The benchmark January 2009 soy meal contract settled RMB172 lower at RMB3,931 a metric tonne, or down 4.2%.


The benchmark futures were limit-down briefly in the morning session on weakening cash prices, before recovering a bit. They were limit-down again just before the exchange closed for the day.


"The cash prices are too high, and a correction is now expected," as soy meal has been overbought due to high demand, said Xiao Jun, an analyst at Shanghai JCI.


The high soy meal prices also curbed demand from the feedmeal sector, which is at comparatively low levels.


The benchmark January 2009 soybean contract settled RMB162 lower at RMB4,920/tonne, or down 3.2%.


The good weather forecast in U.S. major soybean producing areas and an accumulated big jump on the CBOT are likely to trigger a further downward correction in the U.S. market, said a senior industry participant with a state reserve house.


But he added the fall in the domestic market could be limited as local soybean futures prices have fallen a lot recently.


Meanwhile, the recent rise in the dollar and the drop in crude oil prices on the New York Mercantile Exchange overnight added to the pressure, curbing the inflow of speculative funds, said analysts.


Soybean oil, palm oil and corn futures all settled lower.


Tuesday'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           4,920          Dn 162          692,664

Corn                 Jan 2009          1,883           Dn  26          456,398

Soymeal           Jan 2009           3,931          Dn 172          776,674

Palm Oil           Sep 2008         10,442           Dn  86            22,346

Soyoil               Jan 2009         11,514          Dn 142          125,100

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