December 19, 2008

Friday: China soy futures settle up on CBOT; upside likely capped

China's soybean futures traded on the Dalian Commodity Exchange settled slightly higher Friday, tracking overnight gains of its Chicago Board of Trade counterparts.


The benchmark May 2009 soybean contract settled RMB16 higher at RMB3,063/tonne, or up 0.5%.


Cash prices remained stable, and that helped support market sentiment as some processing plants in major soybean producing areas resumed production on steady soyoil and soymeal prices.


Soyoil and soymeal cash prices were supported by the year-end holiday demand and tighter supplies, triggered by earlier suspension of production, said analysts.


Still, sluggish demand for feedmeal and expectations of weaker crude oil prices indicate the rebound in soybean prices may conclude soon, said a local cash trader.


Crude oil futures tumbled to a new 4 1/2-year low Thursday, falling nearly 10% to below US$36 a barrel on worries over collapsing global oil demand.


The bird flu virus found in some poultry in Jiangsu province earlier this week also heightened concerns about a decline in demand for feedmeal.


Speculations that typically supports prices, such as export tax rebate and more purchases by the government to soak up excess stocks, failed to have much impact on the grains market, said Huang Xiao, an analyst at Capital Futures.


Open interest in all soybean contracts fell 18,818 lots to 467,088 lots Friday.


Trading volume rose to 358,798 lots from 327,700 lots Thursday.


Corn futures and soymeal futures settled lower while palm oil futures and soyoil futures settled 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        3,063       Up   16      358,798

Corn            May 2009        1,475        Dn    8      540,948

Soymeal       May 2009        2,254        Dn   46     627,394

Palm Oil        May 2009        4,674        Up   16       71,412

Soyoil           May 2009        5,728        Up   32      242,328

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