September 17, 2008

 

Wednesday: China soybean futures settle down on financial woes; palm oil tumbles
  

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday amid global financial woes.

 

The benchmark January 2009 soybean contract settled RMB37 lower at RMB3,879 a metric tonne after trading in a range of RMB3,814-RMB3,930/tonne.

 

The problems faced by financial institutions on Wall Street have quickly expanded to global markets, triggering a tumble in regional stock markets.

 

"The focus of the (commodities) market is now on the financial crisis, not actual supply and demand," said Xu Wenjie, an analyst at Tianma Futures Co.

 

The blow to local commodities markets is unavoidable, although China's integration with global fincancial markets is not deep, said analysts.

 

Traders were either taking profits or panic selling to stop further losses.

 

But some speculative funds also took to bargain-hunting, as there could be limited room for a fall around current low levels, said analysts.

 

Open interest in each type of crop contract rose Wednesday, with soybeans' open interest up 5,640 lots at 457,956 lots.

 

"As long as the financial situation doesn't deteriorate, there will be opportunities for a rebound in (soybean) prices," said Huang Xiao, a manager at Capital Futures.

 

Xu pegged support for November soybeans traded on the Chicago Board of Trade at US$11 a bushel, which ended 55 cents lower Tuesday at US$11.24.

 

A slight easing of the rise in crude oil prices around noon and tumble in China's stock markets pushed soybean prices significantly lower at the start of the afternoon session, but a recovery in crude prices later helped soybean prices come off session lows, reflecting the sensitive sentiment.

 

Corn futures, soymeal futures, palm oil futures and soyoil futures settled mostly lower.

 

Benchmark palm oil futures hit limit-down Wednesday for a second straight day amid ample supply.

 

Wednesday'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          3,879          Dn  37      1,726,382

Corn               May 2009          1,754          Dn   4         399,604

Soymeal          Jan 2009           3,323          Dn   7      1,309,022

Palm Oil           Jan 2009           6,122          Dn 282         60,452

Soyoil              Jan 2009           7,922          Dn 200        630,154