September 1, 2008

 

Monday: China soybean futures gain as Gustav may support crude oil

China's soybean futures traded on the Dalian Commodity Exchange settled higher Monday on expectations that Hurricane Gustav on the U.S. Gulf Coast may help support crude oil prices.

 

The benchmark January 2009 soybean contract settled RMB74 higher at RMB4,337/tonne, or 1.7%, after trading in a range of RMB4,283-RMB4,365/tonne.

 

In a market that is lacking trading guidance, participants will turn to factors such as crude oil, said Xu Wenjie, an analyst at Tianma Futures Co.

 

Meanwhile, concerns of frost setting in early September also helped support sentiment.

 

But Xu said any effect of such news would be short-term, as basically global soybean farmers are on track to see a much higher harvest in 2008.

 

China's decision to raise and extend the temporary export taxes on fertilizers to guarantee domestic supply amid rising grain prices may help ease pressure on inflation in the long run, but the near term impact on the market may be very limited, analysts said.

 

The temporary export taxes on nitrogenous fertilizers and synthetic ammonia have been hiked to 150% from 100%, effective Monday, the Ministry of Finance said late Friday.

 

The new taxes will remain in effect until Dec. 31, 2008. The country has also extended the temporary 100% tax on other fertilizers to Dec. 31 from the previously planned expiry date of Sept. 30, the ministry said.

 

"Farmers won't get much benefit (from the tax hike) due to the (already) high input costs," said an official at a state-owned grain warehouse, declining to be identified.

 

Soyoil futures, palm oil futures, soymeal futures and corn futures settled mostly higher.

 

Monday'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              4,337           Up  74          887,342

Corn                  Jan 2009               1,760           Up  13         240,208

Soymeal             Jan 2009              3,677           Up   39         587,944

Palm Oil              Jan 2009              7,466           Up 156           66,340

Soyoil                 Jan 2009              9,278           Up 158         545,330