Dalian Soybeans Advance as Festival Boosts Vegetable Oil Demand

By William Bi

Sept. 1 (Bloomberg) -- Soybeans climbed in Dalian on expectation that demand for vegetable oil in China, the world's biggest consumer, will increase ahead of holidays this month, spurring processors to raise crushing. Soybean oil also gained.

Prices advanced before the mid-autumn festival this month, when Chinese people exchange gifts of vegetable oil-rich moon cakes and bottles of cooking oil. Vegetable oil for immediate delivery have gained 100 yuan to 200 yuan ($15-$30) a metric ton today, Tommy Xiao, analyst at Shanghai JC Intelligence Co., said by phone.

``Demand will typically strengthen at this time of year,'' and that's helping reduce some excess domestic supplies of soybean oil, said Nie Ben, manager at Shanghai Mainland Futures Co. in Dalian.

Soybeans for January delivery on the Dalian Commodity Exchange gained as much as 102 yuan, or 2.4 percent, to 4,365 yuan a metric ton, and ended the morning trading session at 4,335 yuan. January-delivery soybean oil rose as much as 250 yuan a ton, or 2.7 percent, to 9,370 yuan and last traded at 9,260 yuan.

The Chicago Board of Trade is closed today for the U.S. Labor Day holiday.

Zen-Noh, Japan's largest corn buyer, suspended the operation of its grain export facility in the U.S. Gulf as Hurricane Gustav approaches the region, threatening shipments from the world's biggest exporter. China currently imports little corn from the U.S., according to customs data.

``I don't think it'll have much of an impact'' on U.S. soybean exports, said Phil Laney, China country director of the American Soybean Association's international marketing. Shutting the elevators is normal, and there are few soybeans being handled because most crops haven't been harvested, he said.

To contact the reporter on this story: William Bi in Beijing at wbi@bloomberg.net