September 3, 2008

 

Wednesday: China soybean futures settle up on US soybean conditions
  

 

Soybean futures traded on China's Dalian Commodity Exchange settled slightly higher Wednesday on a deterioration in conditions for the U.S. soybean crop, but a collapse in crude oil prices limited the rise.

 

The benchmark January 2009 soybean contract settled RMB21 higher at RMB4,237/tonne, or up 0.50%, after trading in a tight range of RMB4,217-RMB4,258/tonne.

 

U.S. corn and soybean conditions continued to deteriorate last week amid dryness in some areas of the Midwest, and the crops remain behind schedule, according to the U.S. Department of Agriculture's weekly crop progress report released Tuesday.

 

The USDA rated 57% of the soybean crop as good to excellent, down from 61% last week. Traders had expected the score to drop one to three percentage points.

 

But the big fall in crude oil prices overnight pressured the overall commodities market, limiting the rise in prices, said analysts.

 

China's economic planner issued guidelines Wednesday to limit the expansion of local soybean processing capacity and help local soybean processors gain market share.

 

China aims to limit soybean processing capacity to 75 million metric tonnes annually by 2010 and 65 million tonnes by 2012, the National Development and Reform Commission said in a statement on its Web site.

 

Analysts said it shows the government is concerned about development in the sector, though it is unlikely to affect market prices any time soon.

 

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

 

Ample stocks of palm oil - around 500,000 tonnes at Chinese ports - will continue to plague domestic vegetable oil prices, Dalu Futures said in a note.

 

Following are 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               4,237               Up  21               943,314

Corn                        Jan 2009                1,728               Dn  15              278,204

Soymeal                   Jan 2009                3,584               Up  10              487,360

Palm Oil                    Jan 2009                7,390               Up  50                73,398

Soyoil                       Jan 2009                9,004               Up  32              440,660