August 6, 2007

 

Monday: China soybean futures settle up on demand; drought concerns

 

 

Soybean futures traded on the Dalian Commodity Exchange settled higher Monday as demand for soyoil and soymeal picked up.

 

The benchmark January 2008 soybean contract settled RMB1 higher at RMB3,435 a metric tonne.

 

Total trading volume rose to 560,488 lots from 378,396 lots Friday. One lot is equivalent to 10 tonnes.

 

Soyoil prices surged last week on dwindling stocks, with demand rising as traders and companies increased purchases in preparation for the Mid-Autumn Festival and the National Day holidays starting late September.

 

Meanwhile, soymeal demand also increased as feedmeal companies and traders started purchasing again on low inventories.

 

The drought in the northeast soybean and corn producing region, which is happening at the crucial growing season for these crops, is also having a psychological impact on traders, said Xu Wenjie, an analyst at Tianma Futures Co.

 

The current drought in China has had an impact on 9.8 million hectares of standing crops, according to data Monday from the Office of State Flood Control and Drought Relief Headquarters.

 

Heilongjiang province, the major soybean producing region, Jiangxi province and Hunan province have been hit the hardest, with 35%, 44% and 33% of total ploughing area affected, respectively, it said.

 

Soymeal futures settled mostly higher, but soyoil futures settled lower after recent rises.

 

The benchmark January 2008 soymeal contract settled RMB10 higher at RMB2,646/tonne, but the benchmark January 2008 soyoil contract settled RMB52 lower at RMB8,328/tonne.

 

Corn futures settled higher.

 

The benchmark January 2008 contract settled RMB13 higher at RMB1,557/tonne.

 

Trading volume for all corn contracts declined to 672,770 lots from 911,446 lots Friday.