October 21, 2008
Tuesday: China soybean futures settle up; mild rise shows market cautious
China's soybean futures traded on the Dalian Commodity Exchange settled higher Tuesday, but the rally moderated after a surge in earlier sessions.
The benchmark May 2009 soybean contract settled RMB31, or 0.9%, higher at RMB3,361/tonne.
The contract opened sharply higher, but edged lower over the course of the session.
China's policy of purchasing soybeans and grain to boost prices has helped soybean prices rebound after overselling amid global financial woes.
But traders said they don't think the measure can have a sustainable impact on the market.
Traders said the government could purchase 1 million-1.5 million tonnes of soybeans, which pales in comparison with annual imports of nearly 30 million tonnes.
"The purchase doesn't address the fundamental problem" of increasing global supply, said Shen Enxian, an analyst at China International Futures Co.
There aren't any signs yet that the overall commodities market is stabilizing, so traders will remain cautious, he added.
Open interest in all soybean contracts rose by 75,866 lots to 668,248 lots Tuesday.
Trading volume rose to 2,676,320 lots from 241,880 lots Monday.
Analysts said the high volume and higher open interest show traders have increasingly divergent opinions about the short-term trend, which may trigger more volatility in the market.
Corn, soymeal, soyoil and palm oil futures settled mostly lower.
Tuesday's settlement prices in yuan a metric tonne for benchmark contracts and volume for all contracts in lots (One lot is equivalent to 10 tonnes):
Contract Settlement Price Change Volume
Soybean May 2009 3,361 Up 31 2,676,320
Corn May 2009 1,674 Dn 24 525,096
Soymeal Jan 2009 2,736 Dn 30 931,058
Palm Oil Jan 2009 4,902 Dn 122 106,166
Soyoil Jan 2009 6,500 Dn 120 632,906
