Volume of soymeal contracts rising in China, with prices up 36% this year

Singapore

NOBODY told China's soybean meal traders that the frenzy in commodities is over.

While trading in everything from steel to cotton futures collapsed following steps by the country's regulators to deflate a speculative bubble in April, the volume of soymeal contracts has continued to expand. The amount of the animal feedstock changing hands in a single day on the Dalian Commodity Exchange is more than the US consumes in an entire year and dwarfs trade on the Chicago Board of Trade.

Prices in China have jumped 36 per cent this year while US futures have returned more than any other raw material on the Bloomberg Commodity Index. Dry weather in Brazil and flooding in Argentina is threatening supplies of soya beans, which are crushed to produce soybean oil and the meal that's fed to animals. There's also speculation that Chinese traders have been surprised by the strength in prices and are now buying to replenish depleted sto…