August 15, 2008
Friday: China soybean futures settle sharply lower on crude, dollar
Soybean futures traded on China's Dalian Commodity Exchange settled sharply lower Friday on falling crude oil prices and a stronger dollar.
The benchmark January 2009 soybean contract settled RMB138 lower at RMB4,064/tonne, or down 3.3%, after trading in a wide range of RMB4,001-RMB4,116/tonne.
A weakening global economic outlook, the strengthening dollar and lower crude oil prices aroused expectations of lower prices for biodiesel - which can be made from soyoil - and falling demand for the full range of soybeans and soybean products, said analysts.
However, the market was irrational in the extent of its selling, as a positive U.S. Department of Agriculture report earlier this week showed tight supply, said Shen Enxian, an analyst at China International Futures Co.
Long position holders were liquidating their positions in soybean contracts and edible oil contracts.
Open interest in total soybean contracts fell 14,980 lots to 395,108 lots, while falling 704 lots in palm oil contracts and 3,204 lots in soyoil contracts.
China imported 170,000 metric tonnes of soyoil in July, down 17% from a year earlier, according to preliminary data issued by the General Administration of Customs Friday.
The country imported a total of 1.47 million tonnes of soyoil in the first seven months, up 10% on year, it said.
The fall in July soyoil imports showed that weaker demand and high import costs were weighing on an already weak market, said analysts.
Soyoil futures and palm oil futures settled sharply lower, touching lower limits during the session.
Corn futures and soymeal futures also settled lower.

Friday's settlement prices in yuan per metric tonne and volume for all contracts in lots (one lot is equivalent to 10 tonnes):

Contract        Settlement          Price          Change             Volume
Soybean         Jan 2009           4,064          Dn 138           1,190,080
Corn               Jan 2009          1,742           Dn  38              620,096
Soymeal         Jan 2009          3,377            Dn  99           1,376,978
Palm Oil          Jan 2009          7,488           Dn 324               17,458
Soyoil             Jan 2009          8,640           Dn 346             297,422


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