November 18, 2008

Tuesday: China soybean futures settle unchanged; trading interest thin


China's soybean futures traded on the Dalian Commodity Exchange settled unchanged Tuesday, with thin trading volume as participants remained cautious amid the ongoing financial crisis.


The benchmark May 2009 soybean contract settled unchanged at RMB3,231/tonne.


The benchmark soybean futures contract has been consolidating within a narrow range of RMB21/tonne the whole day, without any clear directions.


Tumbling stock markets showed a lack of positive trigger, and traders are using each rise as an opportunity for profit-taking, said analysts. A stronger dollar and weaker crude oil prices also weighed on commodity prices.


"With the financial crisis going on, the real economy will be exposed to more problems, which will make any rise (in agricultural commodities) very hard," said Dong Shuangwei, an analyst at Capital Futures.


Under these circumstances, the market tends to shrug off any positive news, even the current dryness in Argentina, a major soybean producing country, he added.


Cash domestic soybean prices in Heilongjiang, a major producing province, were lower as processing plants suspended output on losses, while buyers turned to purchasing the imported commodity, which is cheaper.


Local grain officials have came to Beijing to ask the government for policies to support domestic soybean prices, according to a report from Heilongjiang Daily.


Open interest in all soybean contracts fell 7,396 lots to 594,644 lots Tuesday.


Trading volume declined to 354,752 lots from 533,078 lots Monday.


Corn futures settled slightly higher, but soymeal futures, palm oil futures and soyoil futures settled lower.


Tuesday'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       3,231     Unchanged     354,752

Corn            May 2009       1,597      Up    2          197,182

Soymeal       May 2009       2,508      Dn   33         519,840

Palm Oil        Jan 2009        4,444      Dn   16         139,908

Soyoil           Jan 2009        6,290      Dn   20         344,396

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