September 16, 2008

 

Tuesday: China soybean futures settle down on crude; soyoil limit-down

   

   

Soybean futures traded on the Dalian Commodity Exchange settled sharply lower Tuesday, plagued by a tumble in crude oil prices.

 

The benchmark January 2009 soybean contract settled RMB149 or 3.7% lower at RMB3,916 a metric tonne after trading in a range of RMB3,868-RMB4,025/tonne.

 

The tumble in crude oil prices and a possible rebound in the dollar would help further plague the commodities market, said analysts.

 

Crude oil futures dipped more than 4% Tuesday in Asia, trading at their lowest levels since February, weighed down by the U.S. financial crisis, including the collapse of Lehman Brothers.

 

More trouble in the U.S. banking and insurance sectors showed the impact of the subprime crisis is expanding, forcing investment funds to retreat from the commodities market, said analysts.

 

"The (global economic) crisis has only just began, (and) it's not only a psychological (crisis)," said Gu Jianjun, a senior analyst at Jinyuan Futures.

 

Many analysts expect crude oil prices to fell further toward the US$80-US$85 a barrel level as slowing global economic growth, or even a recession, may damp demand.

 

Big U.S. investment houses, including Lehman Brothers, have or had big long positions in crude oil, and these companies' bankruptcies will trigger liquidation in crude futures, they said.

 

Meanwhile, commodities' fundamentals aren't good as well.

 

The ongoing good harvest of global oilseeds and grain and sluggish consumption will add to the pressure on commodities markets, said Liu Xinghua, an analyst at Great Wall Futures Co., who expects soyoil futures traded on the Dalian Commodity Exchange to fall further from the current RMB8,000/tonne level to RMB6,000/tonne.

 

Corn futures, soymeal futures, palm oil futures and soyoil futures all settled sharply lower.

 

Benchmark soyoil futures and palm oil futures both hit limit-down Tuesday.

 

Tuesday's settlement prices in yuan a metric tonne and the volume for all contracts in lots (One lot is equivalent to 10 tonnes):

 

Contract         Settlement         Price         Change        Volume

Soybeans         Jan 2009         3,916         Dn 149       1,405,684

Corn               May 2009         1,758         Dn  22          472,432

Soymeal          Jan 2009          3,330         Dn 116      1,139,968

Palm Oil           Jan 2009          6,404         Dn 336            2,772

Soyoil              Jan 2009          8,122         Dn 400         139,878