July 21, 2008
Monday: China soybean futures settle sharply down on CBOT tumble Friday
Soybean futures traded on the Dalian Commodity Exchange settled sharply lower Monday, after Chicago Board of Trade soybean futures tumbled Friday amid ideal weather conditions in the U.S. and the end of strikes in Argentina, said analysts.
The benchmark January 2009 soybean contract settled around 3.6% lower at RMB4,687 a metric tonne after trading between RMB4,640 and RMB4,753/tonne.
"The weather concerns and strikes in Argentina both contributed to the earlier rally, so when these fundamental supports change, a pullback is understandable," said Gao Yanrong, an analyst at Dalu Futures.
"What is really worrying is that a quick decline is likely to affect overall market sentiment and lead to overselling," Gao said.
Analysts said following the broad commodities selloff late last week, market sentiment no longer supports speculative long position holders, so they are likely to retreat quickly from the markets.
Soyoil futures also settled sharply lower, with some contracts hitting 5% limit-down. Soymeal futures also fell, weighed down by soybeans and soyoil.
With demand for soymeal strong, traders said they expect soyoil futures to lead the downward correction of the soy complex in the next couple of weeks, because of relatively weak seasonal demand.
Corn futures settled lower on spillover weakness from soy futures.
"Now market participants are keeping a close eye on Nymex crude oil prices, as the activities of index funds affect the performance of metals and agriculture products," said a trader in Shanghai.
Monday's settlement prices in yuan a metric tonne and volume for all contracts in lots:
Contract Settlement Price Change Volume
Soybeans Jan 2009 4,687 Dn 173 848,704
Corn Jan 2009 1,885 Dn 14 357,566
Soymeal Jan 2009 3,782 Dn 119 818,686
Palm Oil Sep 2008 9,620 Dn 440 7,858
Soyoil Jan 2009 10,768 Dn 478 138,886