November 9, 2007

 

Friday: China soybean futures settle down; USDA production report eyed

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Friday, eyeing the final crop production report to be released by the U.S. Department of Agriculture later in the day.

 

The benchmark May 2008 soybean contract settled RMB20 lower at 4,491 a metric tonne.

 

Total trading volume rose to 715,706 lots from 668,658 lots Thursday.

 

One lot is equivalent to 10 tonnes.

 

The USDA is scheduled to release its final crop production report for the year based on conditions as of Nov. 1.

 

The average of analysts' estimates from a Dow Jones Newswires survey peg U.S. soybean production at 2.606 billion bushels, slightly above October USDA projections of 2.598 billion bushels.

 

The average of estimates for the 2007-08 carryout is 213 million bushels, down slightly from the October USDA estimate of 215 million.

 

However, the overall favorable sentiment towards commodities will continue to support the prices of agricultural products.

 

"The rising commodities prices are due to the concerns and worries towards the global resources supply and the reflection of excess liquidity (in the financial market)," said Dalu Futures, adding the world "will say goodbye to a time of low commodities prices."

 

Palm oil futures contracts and soyoil futures settled higher, supported by strong crude oil prices.

 

The benchmark May 2008 palm oil contract settled at RMB8,902/tonne, up RMB56/tonne from Wednesday.

 

Total trading volume for all palm oil futures declined to 4,974 lots from 5,138 lots Thursday.

 

The benchmark May 2008 soyoil contract settled RMB120 higher at RMB9,374/tonne.

 

As the global petroleum diesel market is at least five times the size of the global oils and fats market, a small shift from petroleum diesel to biodiesel is felt many folds in the vegetable oils market, according to a recent note by Credit Suisse.

 

"As a result, food inflation could worsen further," it said.

 

Soymeal futures settled mostly higher.

 

The benchmark May 2008 soymeal contract settled RMB15 higher at RMB3,367/tonne.

 

Corn futures settled higher.

 

The benchmark May 2008 contract settled RMB7 higher at RMB1,774/tonne.

 

Total trading volume for all corn futures rose to 688,022 lots from 517,820 lots Thursday.