November 14, 2008
Friday: China soybean futures settle up; follows surge in equities
Soybean futures traded on the Dalian Commodity Exchange settled higher Friday, along with a surge in domestic and global stock markets.
China's benchmark May 2009 soybean contract settled RMB34 higher at RMB3,236 a metric tonne, or up 1.1%.
Rising expectations of a weekend interest rate cut and continued buying interest prompted by the government's RMB4 trillion stimulus package sent China's benchmark Shanghai Composite Index up 3.1% and the Shenzhen Composite Index up 4.4% Friday.
However, the respite from losses isn't expected to last long.
"The market is not eyeing fundamentals and the technical reason doesn't work," said an industry participant.
Meanwhile, there were expectations that the U.S. may cut rates over the weekend, which may send the dollar lower and support crude oil prices, said Lv Qinghai, an analyst at Tianqi Futures.
However, he said soybean prices will likely move lower as imports are piling up in Chinese ports while processing plants are reluctant to produce soyoil due to low profits.
Traders were cutting positions as they prefer to lock in profits amid high uncertainty.
Open interest in all soybean contracts fell 11,228 lots to 605,198 lots Friday.
Trading volume declined slightly to 848,320 lots from 898,698 lots Thursday.
Corn futures settled little changed, while soymeal futures, soyoil futures and palm oil futures settled mostly slightly higher.
Friday'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 3,236 Up 34 848,320
Corn May 2009 1,583 Up 1 298,808
Soymeal May 2009 2,537 Up 12 657,524
Palm Oil Jan 2009 4,426 Up 8 208,576
Soyoil Jan 2009 6,352 Up 112 530,210