October 14, 2008
Tuesday: China soybean futures settle sharply up on equity, crude
China's soybean futures traded on the Dalian Commodity Exchange settled sharply higher Tuesday, taking cues from strength in other commodities and equity markets.
But, the contracts were off their upper limits touched in earlier session as sentiment remained weak amid global economic uncertainties.
The benchmark January 2009 soybean contract settled RMB107 higher at RMB3,390/tonne, or 3.3%.
Traders said financial rescue plans initiated by various governments may not be sufficient in resolving the current crisis, and they won't dare stay too long in a volatile market. Commodity markets are now tracking financial markets closely, and aren't being driven by fundamentals, said analysts.
"Possibilities of more big falls are not ruled out," said Li Dongji, an analyst at Guotai Jun'an Futures Brokerage.
The contract touched its 5% upper limit briefly at the start of the session, as Dow Jones Industrial Average made its largest one-day intraday point gain ever overnight on European government's commitments to bank recapitalization.
Meanwhile, China's demand for soybean hasn't picked up heavily even as the country's imports rose to a record 4.13 million tonnes in September.
Chinese traders booked more cargoes on expectations that prices will stay near all-time-high levels reached in July, said analysts. It usually takes more than a month from settling the import prices to its actual arrival.
But, prices have tumbled since then, and imports in coming months are likely to be lower on year, said Xu Wenjie, an analyst at Tianma Futures Co.
Open interest in all soybean contracts rose 29,730 lots to 406,866 lots Tuesday.
Trading volume declined to 1,531,238 lots from 2,677,400 lots Monday.
Corn futures, soymeal futures and soyoil futures settled sharply higher.
Palm oil futures settled mixed, but the benchmark contract settled sharply higher.
Tuesday'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 3,390 Up 107 1,531,238
Corn May 2009 1,667 Up 26 901,498
Soymeal Jan 2009 2,776 Up 83 692,206
Palm Oil Jan 2009 5,298 Up 202 73,026
Soyoil Jan 2009 6,894 Up 266 335,386