July 15, 2003

 

China Soybean Futures Settle Down On Soybean Auction News

Shanghai, July 14 (Dow Jones) - China's Dalian Commodity Exchange soybean futures settled lower Monday, pressured by news of the coming sale of soybeans from government reserves.

 

According to a state-run newspaper, the Chinese government plans to offer 800,000 metric tons of soybeans from state-held inventories to ease the current supply shortage in China.

 

The bearish news comes on the heels of the agriculture ministry confirming it will start accepting applications for safety certificates to allow crops containing genetically modified organisms to be exported to China late this month.

 

Expectations of larger soybean imports once the government issues more safety certificates to foreign exporters weighed heavily on Dalian's soybean futures Friday.

 

And Monday, short position holders aggressively increased their holdings, said a trader at Great Wall Weiye Futures in Shanghai.

Meantime, a rumor that major long position holders Cofco Futures Co. and related companies will be investigated by the top regulator soon added more downward pressure to soybean futures.

 

"Such kind of talk is obviously no good for the long side," the Great Wall trader said.

 

"The long position holders won't be able to support the prices any more if the top regulator really launches its investigation," he added.

 

All nine soybean contracts traded in Dalian fell 3-16 yuan ($1=CNY8.28) a metric ton.

 

The actively traded November 2003 contract lost CNY15/ton to CNY2,413/ton, while the January 2004 contract shed CNY10/ton to CNY2,409/ton.

 

Meantime, soymeal futures settled mixed in sluggish trade.

 

The benchmark November 2003 soymeal contract was unchanged at CNY2,045/ton, after trading between CNY2,037/ton and CNY2,052/ton.

 

Trading volume in Dalian soybean futures market shrank about 50% to 488,078 lots from Friday's unusually large 972,270 lots. Open interest was 1,043,188 lots, higher than the previous 1,019,750 lots.