August 27, 2008


Wednesday: China soybean futures settle up on soymeal prices, input rise



China's soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday due to gains in soymeal prices and expected higher input costs.


Soybean processing plants are upping soymeal cash prices to offset losses from weak soyoil prices, and the rise in soymeal is pushing soybean prices higher, analysts said.


The benchmark January 2009 soybean contract settled RMB88 higher, at RMB4,330 a metric tonne, after trading between RMB4,303 and RMB4,365/tonne.


Soybean input costs in major producing Heilongjiang province this year rose to RMB2,700/tonne on average due to surging fertilizer and seed prices, according to data on the China Soybean Web site.


Soybean cash prices are unlikely to fall below RMB4,000/tonne this year due to the high costs, analysts said.


But supply pressure ahead of a good harvest this year also impacted the market.


Meanwhile, slower global economic growth is negatively affecting the overall commodities market; as a result, soybean prices are likely to consolidate in a wide range in the near term, Tianqi Futures said in a note.


Soyoil and palm oil futures settled mostly lower, while soymeal futures settled higher on rising cash prices.


Corn futures settled mixed.


Vegetable oil futures continued to be pressured on a rumor that the government may cut import taxes for soyoil and palm oil to 4% from 9%.


However, analysts said this isn't likely to happen any time soon given sluggish vegetable oil demand and weak prices.


Wednesday'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               4,330              Up  88             1,167,882

Corn                    May 2009               1,840              Up   9                332,676

Soymeal               Jan 2009                3,697             Up  94             1,070,302

Palm Oil                Jan 2009                7,330             Dn 202                57,492

Soyoil                   Jan 2009                9,182             Dn  16               666,346

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