August 4, 2008
Monday: China soybean futures settle sharply lower on policy concerns
Soybean futures traded on the Dalian Commodity Exchange tumbled Monday amid concerns over policy controls during the coming Olympic Games.
Soyoil and palm oil futures also settled sharply lower, hitting limit-down during the session.
The benchmark January 2009 soybean contract settled RMB160 or 3.6% lower at RMB4,242 a metric tonne after trading between a wide range of RMB4,182-RMB4,300/tonne.
The benchmark contract also briefly hit limit-down right before the close.
Stabilizing food prices is a major task for the government during the Olympics, and some big state-owned traders are selling shorts possibly based on hints of government policy, said a local analyst.
Sufficient supply in the cash market also plagued the market, while demand for soybeans in connection with the Olympics is having a limited effect in terms of boosting prices, said analysts.
Meanwhile, the weather outlook for major U.S. soybean producing areas remains good, leaving little excuse for long position holders to push up the market.
Global funds are retreating from soybeans and crude oil futures, adding to the market's bearish sentiment, said Li Dongji, an analyst at Guotai Junan Futures Co.
But long position holders are not actively selling yet. They are still waiting to see whether a technical rebound occurs, although the market has lost confidence, said Xiao Jun, an analyst at commodity consultancy Shanghai JCI.
Analysts said the bottom won't be seen unless the long position holders surrender to the short position holders.
Soymeal futures and corn futures both settled lower.
Monday'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
Soybean Jan 2009 4,242 Dn 160 1,247,162
Corn Jan 2009 1,787 Dn 29 542,284
Soymeal Jan 2009 3,532 Dn 111 996,216
Palm Oil Jan 2009 8,206 Dn 390 19,180
Soyoil Jan 2009 9,384 Dn 436 155,576
