China soymeal futures plunge amid macro selloff, trade warnings

Soymeal futures in China slumped on Friday as traders dumped positions amid a wider sell-off in the global market, with...

Soymeal futures in China slumped on Friday as traders dumped positions amid a wider sell-off in the global market, with Chinese futures exchanges adding to the move as they issued statements warning of market volatility, sources said.

Soymeal futures contracts on the Dalian Exchange fell 3-5% along the curve on Friday to their lowest level in more than three weeks, with March futures down 4.11% to CNY3,427/mt ($531/mt).

“It was largely following the overseas market overnight,” said a futures trader at a major trading house.

Several other trade sources echoed that assessment.

CBOT soybean futures dropped 15-20 c/bu on Thursday and continued to slide on Friday, down 18-25 c/bu in the early session.

Global equity and commodity prices have nosedived at the end of the week against the backdrop of rising yields in US treasuries, attracting funds to flock to the safer asset and abandon positions perceived to be riskier.

The moves meant four futures exchanges in China issuing statements that warned of increased market volatility, shaking confidence further and adding to the selloff.

“Market prices have fluctuated greatly in recent days. All member units are requested to strengthen investor education and risk prevention, and remind customers to participate in futures transitions rationally and compliantly,” Dalian Commodity Exchange said.

This was interpreted by traders as a signal to calm the market forcing traders to exit long positions.

“Prices rose too quickly. Everyone wants to slow down,” one trader said.

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