October 6, 2008


Monday: China soybean futures settle limit down amid U.S. financial crisis


China's soybean futures traded on the Dalian Commodity Exchange settled limit down Monday, catching up with the counterparts' 15% loss on the Chicago Board of Trade last week, when the Chinese markets were closed for the long National Day holiday.


The benchmark January 2009 soybean contract settled RMB201 lower at RMB3,834 a metric tonne, or down 5.0%.


The contract opened limit down and didn't move for the whole session.


The open interest in all soybean contracts fell 3,856 lots to 356,146 lots Monday.


Concerns over the U.S. economy persist despite the government having passed a US$700 billion bailout plan Friday.


Money is leaving the commodities market as traders think CBOT prices may fall back to US$5-US$10 a bushel, levels hit before the current bull run, said Xu Wenjie, an analyst at Tianma Futures.


The trading volume tumbled to 5,340 lots from 778,708 lots Sept. 26, the last trading session before the market was closed for the long holiday.


"It's just the start of a bear market, and (investors) prefer to cash in," said Xiao Jun, an analyst at commodities consultancy firm Shanghai JCI.


The market will head lower, and any rebound could be a good chance for short selling, he added.


Analysts said how the U.S. financial crisis unfolds will decide the commodities market outlook, as the global economy faces the risk of a recession.


The benchmark corn, soybean meal, soybean oil and palm oil futures all settled limit down.


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         3,834        Dn  201         5,340

Corn             May 2009         1,675         Dn   88      234,920

Soymeal        Jan 2009          3,259        Dn  171         3,004

Palm Oil         Jan 2009          6,176        Dn  322            936

Soyoil            Jan 2009          7,832        Dn  412            922

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