November 27, 2008
Thursday: China soybean futures settle little changed; corn lower
Soybean futures traded on the Dalian Commodity Exchange settled little changed Thursday, the first day of trading after the People's Bank of China slashed interest rates, a move that will probably only have limited impact on the demand outlook, analysts said.
The benchmark May 2009 soybean contract settled RMB7 higher at RMB3,273 a metric tonne after trading between RMB3,250/tonne and RMB3,295/tonne.
Both equities and commodities in China were boosted early in the session by the aggressive interest rate cuts announced by the central bank late Wednesday, but most of them came off highs as economic outlook concerns outweighed the positive news, said Wang Xiaoguang, an analyst at Galaxy Futures.
The People's Bank of China Wednesday said it would slash lending and deposit rates by 108 basis points, its biggest interest rate cuts in about a decade.
China's expected economic recovery in the second half of next year is unlikely to boost demand for agricultural products, UBS said Thursday.
Chinese prices of most farm products are well below international levels, as trade barriers in the country prevented local prices from rising to the full extent of the price boom in 2007 and 2008, it said in a report.
Soymeal and soyoil futures also settled higher.
Analysts said soymeal is likely to continue being the worst performer in the soy complex as the feedmeal demand outlook remains weak, while soyoil is likely to take positive cues from crude oil prices - if crude prices stabilize.
Corn futures settled lower, and analysts said charts indicate further downside.
Zhang Ping, director of the National Development and Reform Commission, said Thursday China will buy more grains, edible oils, cotton and meat to boost reserves and stabilize domestic prices of agricultural products.
"The government asked state grain companies and other purchasers to buy (such commodities) to stabilize agricultural product prices and increase farmers' incomes," Zhang told a press conference, without specifying the affected products or the volumes the government plans to buy.
Thursday's settlement prices in yuan a metric tonne and volume for all contracts in lots:
Contract settlement Price Change Volume
Soybeans May 2009 3,273 Up 7 346,838
Corn May 2009 1,575 Dn 10 237,156
Soymeal May 2009 2,396 Up 7 359,334
Palm Oil Jan 2009 4,598 Up 104 124,018
Soyoil May 2009 6,252 Up 150 482,408