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