October 13, 2008


Monday: China soybean futures settle down, but may near S/T bottom



Soybean futures traded on China's Dalian Commodity Exchange settled lower Monday, tracking their counterparts movements Friday on the Chicago Board of Trade.


The benchmark January 2009 soybean contract settled RMB55 lower at RMB3,283/tonne, or down 1.6%.


As the global financial crisis hits the broader economy harder, more investment funds are expected to leave commodities markets, said analysts.


Higher output and dwindling demand will likely continue to plague the soybean market, although farmers expect higher prices due to higher input costs, Tianqi Futures said in a note.


On Friday, the U.S. Department of Agriculture projected a 2.2 million acre increase in harvested area, which more than offset a reduction in yields, an analyst said. With less demand for soy products, soybean ending inventories rose 85 million bushels to 220 million.


USDA reported 2008-09 soybean production at 2.983 billion bushels, up 49 million from the September estimate of 2.934 billion. The average of analysts' estimates had anticipated a crop size of 2.920 billion bushels.


But Wang Xiaoguang, an analyst at Galaxy Futures, said soybean prices may be near a short-term bottom as the fall moderated Monday, and after the recent volatility soybean prices may take a breather before declining further.


China imported 28.70 million metric tonnes of soybeans in the first nine months of the year, up 32.2% from the same period a year earlier, according to preliminary data issued Monday by the General Administration of Customs.


That means the country imported in September alone 4.14 million tonnes of soybeans, more than twice the level of the same month of last year.


Open interest in all soybean contracts rose 47,594 lots to 377,136 lots Monday.


Trading volume jumped to 2,677,400 lots from 381,328 lots Friday.


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


The following are 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          3,283          Dn   55       2,677,400

Corn                 May 2009          1,641          Up   21       1,235,910

Soymeal            Jan 2009          2,693           Dn   70         966,088

Palm Oil             Jan 2009          5,096           Dn  178          64,136

Soyoil                Jan 2009          6,628           Dn  198        598,960

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