August 22, 2008

 

Friday: China soybean futures settle higher; CBOT gains support

   

 

China's soybean futures traded on the Dalian Commodity Exchange settled higher Friday, supported by overnight gains on the Chicago Board of Trade.

 

The benchmark January 2009 soybean contract settled RMB22 higher at RMB4,312 a metric tonne, or up 0.5%, after trading in a RMB4,267-RMB4,357/tonne range.

 

Soybean prices opened higher, in line with the gains on the CBOT overnight, but edged lower during the session on supply pressure.

 

China's soybean imports in July rose 16% on year to 3.5 million tonnes, the General Administration of Customs said Friday.

 

In the January-July period, soybean imports rose 23% to 20.73 million tonnes.

 

An expected good global harvest is on track, but many farmers in China's northeast major soybean producing areas said they won't sell their crop if cash prices fall below RMB4,100/tonne during the harvest season, as it will mean no profits.

 

Soybean prices in Beian in Heilongjiang, the biggest producing province, were around RMB4,000/tonne this week, unchanged from a week ago.

 

Meanwhile, possible early frost in major soybean producing areas in U.S. and China have caused concerns of an output cut.

 

"Thus, there are a lot of uncertainties ahead, which will likely lead to soybean prices consolidating within a big trading range," said Tu Xuan at commodity consultancy firm Shanghai JCI.

 

Soybean oil, palm oil and soybean meal futures settled higher while corn futures settled lower.

 

China's July corn imports rose elevenfold to 3,365 tonnes, but since the actual volume is small, it had no impact on prices.

 

However, rising imports and falling exports reflect a tightening corn supply situation in China, said a local analyst.

 

Corn exports fell 94% in July to 14,259 tonnes.

 

China has been controlling the corn trade strictly due to concerns over grain security.

 

The country's on-year soy meal imports surged more than 100 times in July to 14,003 tonnes on record-high local soy meal prices earlier this year, which sharply declined recently due to a sluggish feedmeal demand.

 

Importers are now on the sidelines, while the Ministry of Commerce expects soy meal imports in August to fall to 2,000 tonnes, based on importers' reports.

 

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

 

Contract          Settlement           Price          Change         Volume

Soybean           Jan 2009            4,312           Up  22       1,057,122

Corn                 Jan 2009            1,733           Dn   3          270,866

Soymeal           Jan 2009            3,577           Up  14          917,934

Palm Oil            Jan 2009            8,022           Up  84           27,946

Soyoil               Jan 2009            9,610           Up 258         659,006