August 26, 2008
Tuesday: China soybean futures settle lower, soyoil down sharply
Soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday as a fresh selloff following recent gains was triggered by weak sentiment toward commodities, said analysts.
The benchmark January 2009 soybean contract settled RMB85 lower at RMB4,242 a metric tonne, after trading between RMB4,166 and RMB4,318/tonne.
"There will be further downside, given the weak macro environment," said Li Honglei, an analyst at Nanhua Futures.
"Looking at the end consumers, the demand is clearly shrinking, and now that there is no economic stimulus package from the government, the post-Olympics sentiment isn't very positive," Li said.
Analysts said Tuesday's selloff in China commodities across the board, helped by a retreat of shares, reflected market participants' concerns over the economic outlook, with no fundamental developments of the commodities.
Soymeal and soyoil futures settled sharply lower.
"The weak seasonal demand is one reason, and the substitute use of rapeseed oil imposed further pressure on soyoil futures," said a trader.
Rapeseed oil futures traded on the Zhengzhou Commodity Exchange hit limit-down in the afternoon session.
Analysts said processing plants have increased their offer prices due to high production costs, but as demand didn't pick up, the increase in cash prices of soyoil may not last for long.
Crushing soybeans produces soymeal used to make animal feeds and soyoil used in edible oil production.
Corn futures settled little changed.
Tuesday's settlement prices in yuan a metric tonne and the volume for all contracts in lots:
Contract Settlement Price Change Volume
Soybeans Jan 2009 4,242 Dn 85 1,583,762
Corn May 2009 1,831 Up 12 458,022
Soymeal Jan 2009 3,603 Dn 56 1,341,066
Palm Oil Jan 2009 7,532 Dn 268 29,858
Soyoil Jan 2009 9,198 Dn 290 462,850
