November 6, 2008


Thursday: China soybean futures settle down with CBOT; sluggish demand



Soybean futures traded on China's Dalian Commodity Exchange settled sharply lower Thursday, along with the fall on the Chicago Board of Trade overnight.


The benchmark May 2009 soybean contract settled RMB112 lower at RMB3,249/tonne, or down 3.3%.


Front-month contracts were somewhat supported by the government's purchase of cash soybeans in major producing areas, while the late-month contracts were weaker on expectations of sluggish market demand.


The U.S. Department of Agriculture is scheduled to release updated crop estimates Nov. 10 at 8:30 a.m. EST, or 1330 GMT, and the market is concerned that soybean output and ending stocks will be higher.


Despite the support from government purchases, local soybean prices are unlikely to rise due to lower prices of imported soybean prices, said traders.


The benchmark soybean contract is likely to set new lows in a weak market, Tianqi Futures said in a note.


Open interest in all soybean contracts rose 28,598 lots to 606,988 lots Thursday.


Trading volume fell to 748,146 lots from 1,083,016 lots Wednesday.


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


Traders said sluggish demand in feedmeal sector remains a major negative factor for soymeal prices.


Thursday'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         3,249        Dn  112     748,146

Corn             May 2009          1,620        Dn   12     159,872

Soymeal        May 2009          2,478       Dn   98      774,104

Palm Oil         Jan 2009           4,732       Dn  168       63,266

Soyoil            Jan 2009           6,532       Dn  248     474,804

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