September 8, 2003
China Soybean Futures Settle Mostly up on Talk of Tight Supply
China's Dalian Commodity Exchange soybean futures settled mostly higher Monday, on market talk that soybean supply in some areas was tight due to insufficient imports, traders said.
Sources monitoring shipping news said soybean processors in the northern provinces of Shandong and Liaoning were experiencing tight supply, as imports had slowed following a recent increase in soybean prices in the U.S. spot market.
A trader at Zhejiang Tianma Futures predicted that the talk of lower imports could boost soybean futures prices further in the coming days.
Owing to its fast-growing soybean processing industry, China relies on imported soybeans to meet about half of its needs each year.
The U.S. is China's largest soybean supplier, followed by Brazil and Argentina.
Eight of the nine soybean contracts traded in Dalian rose by 6-29 yuan ($1=CNY8.28) a metric ton, with the most heavily traded January 2004 contract gaining CNY14/ton to CNY2,536/ton.
Bucking the trend was the November 2003 contract, which edged down CNY1/ton to CNY2,510/ton.
The market talk about tight soybean supply encouraged buying in the soymeal futures market as well, with all six soymeal contracts posting sharp gains Monday.
The benchmark January 2004 soymeal contract added CNY25/ton to CNY2,198/ton, after trading between CNY2,180-CNY2,211/ton.
Trading volume in Dalian's soybean futures market increased to 496,140 lots from Friday's 406,364 lots. Open interest was 779,626 lots, higher than Friday's 765,792 lots. One lot is equivalent to 10 tons.