October 22, 2008
Wednesday: China soybean futures settle sharply down on crude oil tumble
China's soybean futures traded on the Dalian Commodity Exchange settled sharply lower Wednesday, with the tumble in crude oil futures pushing soybean and soy products to limit-down in the late session.
The benchmark May 2009 soybean contract settled RMB101, or 3.0%, lower at RMB3,260 a metric tonne.
The contract opened lower and traded within a very tight range in negative territory during the morning session.
But it stumbled in the afternoon session, falling sharply to touch the lower limit near the closing bell, alongside falling crude oil prices.
Crude oil futures fell below US$70 a barrel Wednesday in Asia, weighed by a strengthening U.S. dollar and the expectation of a U.S. oil stocks buildup.
A stronger dollar against the euro dominated the slide of oil futures, which fell below US$70 soon after the euro sank to US$1.3 on the EBS midday.
"It's difficult to judge the short-term trend in this market," said Cui Ruijuan, a trader at Guangfa Futures Brokerage.
Meanwhile, concerns over whether the financial crisis may deteriorate persist.
The stronger dollar is also keeping traders away from high-risk commodities and pushing them towards government bonds, said Yu Haifeng, an analyst at Tianqi Futures.
The open interest in all soybean contracts fell 25,646 lots to 642,602 lots Wednesday.
The trading volume fell to 1,819,224 lots from 2,676,320 lots Tuesday.
Corn, soybean meal futures, soybean oil and palm oil futures all settled lower.
Soy oil and palm oil futures touched limit-down in the afternoon session.
Wednesday'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 3,260 Dn 101 1,819,224
Corn May 2009 1,655 Dn 19 391,114
Soymeal Jan 2009 2,696 Dn 40 1,658,902
Palm Oil Jan 2009 4,738 Dn 164 60,880
Soyoil Jan 2009 6,296 Dn 204 393,720
