SOYBEAN MEALFUTURES
TRADING MANUAL
Dalian Commodity Exchange
SOYBEAN MEAL FUTURESTRADING MANUAL
DCE Investor Education Material
Futures Trading Manual Series
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Distribution of DCE MembersBy Dec. 31, 2015
Guangdong
H.K.Macao
Hainan
GuangxiTaiwan
Fujian
Jiangxi Guizhou
Yunnan
Sichuan ChongqingHubei
Hunan
Anhui
HenanShaanxi
Shanxi
Hebei Tianjin
Beijing
Jilin
Heilongjiang
Gansu
Ningxia
Qinghai
Xinjiang
Tibet
Inner Mongolia
Shandong
Zhejiang
Shanghai
Jiangsu
Liaoning
CONTENTS
I. Soybean Meal Contract Overview
II. Production, Distribution and Consumption of Soybean Meal
III. Major Factors Influencing Soybean Meal Price
IV. Measures of Risk Management of Soybean Meal Futures Trading
V. Procedures and Relevant Rules for Delivery of Soybean Meal Futures
Annex 1: DCE Soybean Meal Futures Contract
Annex 2: DCE Soybean Meal Delivery Quality Standard
Annex 3: List of Designated Delivery Warehouses for DCE Soybean Meal
Annex 4: DCE Soybean Meal Price Daily Chart
1
2
4
7
9
15
16
17
SOYBEAN MEAL FUTURES TRADING MANUAL
14
Use of Soybean Meal in Feed Industry (%)
Source: Soybean Infosource
Poultry 52%
29% Hogs
7% Cattle
6% Cows
2% Pets2% Food Industry
2% Others
Soybean meal is a by-product of soybean oil extraction. There are two types of soybean meal: single leaching soybean meal and dual leaching soybean meal. The first is the by-product after soybean oil extraction by way of leaching, and the latter is the by-product after soybean oil extraction by way of crushing and leaching. China’s soybean meal market is dominated by single leaching soybean meal, as it is more sophisticatedly processed and richer in protein.
Soybean meal is generally irregularly-shaped flakes, pale-yellow or light-brown-colored, and smells roasted soybeans. Among the 12 oil meal feeds including cottonseed meal, peanut meal and rapeseed meal, soybean meal is the one with the largest production and the widest application. As a raw material rich in protein, soybean meal is not only a major component of livestock and poultry feed, but also used in pastries, healthy food and cosmetics, as well as in making antibiotics. Besides, aqua-cultural need of soybean meal has been increasing rapidly in recent years. With the advancement of science and technology, soybean meal will be put into even wider use.
As an important source of vegetal protein, soybean meal is characterized with fluctuating price, long industrial pipeline, numerous engaging companies and widespread influence, provoking strong hedging and investment needs among relevant companies. Through the successive launches of soybean, soybean meal and soybean oil contracts, DCE offers a comprehensive portfolio and a perfect hedging system of soybean-relevant products, providing a handy and all-round hedging venue for relevant companies.
I. Soybean Meal Contract Overview
1
Soybean meal is primarily produced in the U.S., Brazil, Argentina, China, India and the E.U. China currently produces over 29% of the world’s total soybean meal. In recent years, with the rapid development of China’s crushing industry, China’s production of soybean meal maintains an annual growth rate of approximately 20%.
China is one of the major producers of soybean meal. China’s annual output of soybean meal reached 15 million tons in 2000, and maintains rapid growth rate since 2001. In 2009, China overtook the U.S. as the world’s largest soybean meal producer.
At the same time, China’s soybean meal production landscape changed drastically. Before mid 1990s, the three provinces in northeast China were the country’s major soybean meal production bases, producing over 60% of the country’s total. However, the position has been taken over by coastal regions such as Shandong, Jiangsu and Guangdong, as oil extraction plants in the coastal areas have been thriving since 2002.
The world’s consumption of soybean meal leaps forward in recent years, and expects to achieve 215.19 million tons in the year of 2015/16. Currently the soybean meal takes up over 60% of the world’s total consumption of protein meal.
The E.U. had been the world’s largest soybean meal consumer until 2008, and its annual demand remains around 30 million tons in recent years. In the year of 2008/09, China overtook the E.U. to become the world’s largest consumer of soybean meal, and its consumption stood at 62.08 million tons in the year of 2015/16. The global consumption of
2
II. Production, Distribution and Consumption of Soybean Meal
Output of the World’s Largest Soybean Meal Producers 1999/00-2015/16
Unit: 1,000 tons
Source: U.S. Department of Agriculture
Country
Argentina
Brazil
China
India
U.S.
E.U.
2. Consumption
Soybean Meal Futures Trading Manual
Global
1. Production
99/00
13,712
16,478
11,975
3,376
34,102
11,407
107,085
00/01
13,718
17,725
15,050
3,574
35,730
13,310
116,007
01/02
16,559
19,407
16,300
3,697
36,552
14,243
124,864
02/03
18,663
21,449
21,000
2,694
34,649
13,123
130,222
03/04
19,761
22,450
20,190
4,459
32,953
11,221
128,908
04/05
21,601
22,740
24,026
3,616
36,936
11,408
138,605
05/06
25,012
21,920
27,296
5,381
37,416
10,904
146,402
06/07
26,061
24,110
28,465
5,255
39,037
11,693
153,806
07/08
27,071
24,890
31,280
6,705
38,359
11,808
158,707
08/09
24,363
24,700
32,475
5,960
35,473
10,223
152,160
09/10
26,624
26,120
38,644
6,240
37,836
9,950
165,275
10/11
29,312
28,160
43,560
7,440
35,608
9,633
174,344
11/12
27,945
29,510
48,288
7,720
37,217
9,668
180,484
12/13
26,089
27,310
51,440
7,920
36,174
10,398
181,258
14/15
30,928
30,890
59,008
5,600
40,879
11,218
207,172
15/16
33,400
30,960
63,910
5,160
40,564
11,690
216,917
13/14
27,892
28,540
54,531
6,640
36,909
10,614
189,532
soybean meal was propelled in part by the momentous growth of soybean meal consumption in East Asian countries such as China, Korea and Japan and Southeast Asian countries since 2004.
Chinese residents’ intake of meat, eggs, poultry and fish increases significantly as their living standards improve, propelling the booming of feed processing industry. The rapid increase of feeds for poultry and quality lean hogs stimulates the demand for quality protein feeds. Meal products are various in China and the outputs of rapeseed meal and cottonseed meal are both large. However, as both kinds of meal cannot be used in feeds unless detoxified, the most widely used quality meal in China is soybean meal.
In China, soybean meal is mainly consumed in the Pearl River Delta and the Yangtze River Basin, or to be specific, provinces and cities of Guangdong, Sichuan, Jiangsu, Hu’nan, Zhejiang, Jiangxi, Anhui, Hubei, Fujian, Beijing and Shanghai.
Argentina, Brazil, the U.S. and India are currently the largest soybean meal exporters in the world, with Argentina and Brazil ranking the top two. In the year of 2015/16, 71% of the world’s soybean meal export was from Argentina and Brazil, and around 16% from the U.S. India’s soybean meal export mainly goes to Southeast Asia, accounting for around 0.4% of the global export volume.
The demand and supply landscape of soybean meal changed tremendously since mid 1990s. Before 1994, China was one of the major soybean meal exporters, with an annual export volume of over 1 million tons. However, as the domestic demand surged and the number of domestic soybean for oil extraction declined in the next several years, the production of soybean meal fell short of meeting consumption demands, making China one of the major importers. In the year of 1997/98, China imported 4 million tons of soybean meal.
3
Global Consumption of Soybean Meal 1999/00-2015/16Unit: 1,000 tons
Source: U.S. Department of Agriculture
Country
U.S.
Brazil
E.U.
China
Global
3. Export
99/00
27,289
7,086
29,419
12,562
108,579
00/01
28,363
7,063
30,910
14,995
115,775
01/02
29,545
7,580
33,657
15,204
123,177
02/03
29,096
8,055
33,594
20,157
129,910
03/04
28,531
7,696
32,982
19,547
127,632
04/05
30,446
8,960
32,893
23,437
136,734
05/06
30,114
9,328
33,126
27,776
145,273
06/07
31,166
11,118
33,525
27,630
150,979
07/08
30,148
12,257
35,432
30,849
157,417
08/09
27,898
12,418
31,836
31,673
153,243
09/10
27,795
13,000
30,359
37,546
161,484
10/11
27,489
13,950
30,952
43,382
170,861
11/12
28,614
14,100
29,670
47,435
177,995
12/13
26,308
14,200
27,042
50,091
177,449
13/14
26,804
14,650
28,392
52,534
186,270
14/15
29,243
15,250
30,142
57,471
201,952
15/16
30,209
15,550
31,642
62,080
215,192
Soybean Meal Futures Trading Manual
1. Soybean Supply
The supply of soybean meal, the by-product of soybean processing, is determined by the supply of soybean. Generally speaking, the increase in soybean supply leads to the increase in soybean meal supply. There are two main sources of soybeans, i.e. from home and from abroad. China’s soybeans are mostly produced in Northeast China, the Yellow River Basin
It was when China ramped up soybeans imports since 1999 to accommodate the needs of domestic capacity-expanding oil extraction plants, that the domestic output of soybean meal finally met China’s rocketing consumption demand.
4
III. Major Factors Influencing Soybean Meal Price
Export Volumes of the World’s Major Soybean Meal Exporters 1999/00-2015/16
Unit: 1,000 tons
Source: U.S. Department of Agriculture
Country
Argentina
Brazil
China
India
U.S.
E.U.
Global
Supply and Demand Balance Sheet of Soybean Meal in China 1999/00-2015/16
Unit: 1,000 tons
Source: National Grains and Oils Information Center
(I) Soybean Meal Supply
Production
Import
Annual Supply
Feed Consumption
Other Consumption
Annual Balance
Annual Demand
Export
Consumption
Annual Domestic
99/00
13,309
9,950
49
2,469
6,912
177
34,193
00/01
13,730
10,673
155
2,363
7,335
253
36,261
02/03
18,468
13,657
843
1,510
5,728
346
43,044
01/02
16,586
11,862
1,123
2,573
7,271
332
41,784
03/04
19,221
14,792
662
3,675
4,690
399
46,075
04/05
20,650
14,256
658
2,243
6,659
533
47,699
05/06
24,222
12,895
357
4,268
7,301
714
52,245
06/07
25,625
12,715
867
4,143
7,987
544
54,699
07/08
26,816
12,138
634
5,285
8,384
422
56,063
08/09
24,025
13,109
1,017
3,808
7,708
464
52,844
09/10
24,914
12,985
1,181
3,117
10,125
471
55,609
10/11
27,615
13,987
472
4,800
8,238
609
58,543
11/12
26,043
14,678
966
4,391
8,845
884
58,270
12/13
23,667
13,242
1,365
4,354
10,111
536
57,866
13/14
24,972
13,948
2,017
2,742
10,474
296
60,158
14/15
28,545
14,390
1,595
1,072
11,929
362
63,643
15/16
31,250
15,600
1,850
250
10,614
400
66,268
99/00
13,170
634
13,804
12,500
500
13,000
29
13,029
775
00/01
16,170
96
16,266
15,000
550
15,550
107
15,657
1,109
01/02
15,000
21
15,221
14,500
580
15,080
1,051
16,131
-1,910
02/03
21,695
0
21,695
19,061
600
19,661
795
20,456
1,239
03/04
20,012
18
20,031
19,834
650
20,484
632
21,116
-1,085
04/05
26,490
69
26,559
24,300
850
25,150
633
25,783
776
05/06
27,425
836
28,261
26,300
1,000
27,300
331
27,631
630
06/07
27,385
319
27,416
26,100
800
26,900
836
27,736
-320
07/08
30,310
203
30,513
29,000
850
29,850
595
30,444
69
08/09
33,400
211
33,611
31,500
950
32,450
996
33,446
165
09/10
39,350
80
39,430
35,500
1,000
36,500
1,149
37,649
1,781
10/11
43,300
291
43,591
40,000
1,200
41,200
434
41,634
1,957
11/12
47,200
107
47,307
45,000
1,300
46,300
927
47,227
80
12/13
49,555
16
49,571
47,500
1,400
48,900
1,323
50,223
-652
13/14
52,670
20
52,680
50,500
1,400
51,900
1,993
53,893
-1,203
14/15
56,583
50
56,633
53,500
1,450
54,950
1,500
56,450
183
15/16
59,723
30
59,753
56,000
1,500
57,500
2,000
59,500
253
and the Huaihe River Basin. In recent years, China’s yearly production of soybeans hovers around 12 million tons, including 6 million tons of commodity soybeans. In the year of 2015/16, China’s soybean import will reach 80 million tons.
2. Soybean Price
Soybean price has an immediate effect on the cost of soybean meal production. In recent years, as many large domestic oil extraction companies prefer imported soybeans, the price of imported soybeans is exercising even more influence on that of soybean meal.
3. Soybean Meal Production
The current production of soybean meal is a variable subject to factors such as soybean supply, soybean crushing margin and production cost. Generally speaking, the production and price of soybean meal is negatively correlated, that is, the larger the production, the lower the price and vice versa.
4. Soybean Meal Stock
Soybean meal stock, integral to total production, indicates whether soybean meal is in short supply. The price goes up when there is a shortage and goes down when there is an ample supply. As soybean meal is not easy to preserve, the price will drop once the stock increases.
5
Major Factors Influencing Soybean Meal Price
Prices and demand of cottonseed meal, rapeseed
mea
l etc.
Soybean MealPrice
Prices of related goods
Tariff, t
rade
and
food
pol
icie
s
Impo
rt, e
xpor
t and
tra
de p
olicie
s
Spot and futures
prices of soybean and
soybean meal at home
and abroad
Soybean production / import / soybean
mea
l pro
duct
io
n / stock etc.
Live
stock
/ poultry inventories and their prices Feed industry pr
ospe
rity
inde
x
Supply o
f
soybea
n meal
Soybean meal
demand
China is a large consumer of soybean meal with an annual growth rate of over 8% in recent
years. As soybean meal accounts for 52% of poultry feeds, the price of livestock and poultry
has an immediate effect on the demand of feeds. Generally speaking, there is a positive
correlation between the price of livestock and poultry and that of soybean meal. According
to statistics, over 90% soybean meal is used in producing various feeds. As a result, the
demand of soybean meal will be boosted by a robust feeds industry and be suppressed by a
week one.
1. The price relations between soybean meal and soybean and soybean oil
Soybean meal is the by-product of soybean processing. Every ton of soybean produces
approximately 0.18 tons of soybean oil and 0.8 tons of soybean meal. The price of soybean
meal and soybean is closely related. Generally speaking, the price of soybean meal is
affected by the yearly yield of soybean: the price goes down when it’s a bumper year and up
when it’s a poor year. The prices of soybean oil and soybean meal are also related to a certain
degree. The price of soybean meal goes down when that of soybean oil goes up. If soybean
oil is unmarketable, the production of soybean meal will decrease, leading to an increase in
soybean meal price.
Soybean crushing margin is one of the determinants of soybean meal supply. Some plants
will halt production if the margin remains low, leading to an decrease in soybean meal
supply.
2. The influence of the price of substitute goods
The price of soybean meal can be affected by the prices of substitute goods, such as
cottonseed meal, peanut meal and rapeseed meal as well. Feeds companies will turn to the
substitute goods if the price of soybean meal stays high.
New food policies, which are adopted by an increasing number of countries in response to
the outbreaks of avian influenza, bovine spongiform encephalopathy (BSE) and
foot-and-mouth disease (FMD), and the concern of the healthiness of GMFs, could have an
immediate impact on the livestock breeding industry and the demand of soybean meal.
6
Soybean Meal Futures Trading Manual
(II) Soybean Meal Consumption
(III) The Influence of Prices of Related and Substitute Goods
(IV) Relevant Agricultural, Trade and Food Polices
(V) Relevant Websites
7
Food and Agriculture Organization of the United Nations
U.S. Department of Agriculture
American Soybean Association
CME Group
U.S. Grains Council
Ministry of Agriculture of China
China Animal Agriculture Association
China Feed Online
China Feed Information
China JCI
21Agri
China Soybean Online
http://www.fao.org
http://www.usda.gov
http://www.soygrowers.com
http://www.cmegroup.com
http://www.grains.org
http://www.agri.gov.cn
http://www.caaa.cn
http://www.chinafeedonline.com
http://www.china-feed.com
http://www.chinajci.com
http://www.21agri.com
http://www.dadou.com.cn
The minimum trading margin of soybean meal futures contract is 5% of the contract value. The Exchange sets up different levels of margins which are increased with the size of open interest and the time approaching the delivery day.
1. Margins of Soybean Meal Futures Contract Approaching Delivery Day
IV. Measures of Risk Management of Soybean Meal Futures Trading
Trading Date
The 15th trading day of the month immediately preceding the spot-month
The 1st trading day of the spot-month
Levels of Margins (RMB/Contract)
10% of contract value
20% of contract value
(I) Margin Requirements
2. Margins of Soybean Meal Futures Contract with Different Sizes of Open Interest
The Exchange may increase the levels of margins subject to the increase of open interest of a contract, and release them to the market.
The position limit refers to the Exchange-stipulated maximum amount of speculative
positions of a certain contract that a member or client can hold.
The position limit for a futures contract in a certain period of trading will be implemented as of the time of settlement one trading day before the beginning day of such period of trading.
Positions established for the purpose of hedging, which should go through the approval procedures, are exempted from position limit.
Position limits from the month immediately preceding the spot-month to the spot-month
8
Open interests
≤200,000
>200,000
(Unit: Contract)
(Unit: Contract)
Trading Date
The spot-month
10,000
Clients
5,000
Soybean Meal Futures Trading Manual
(II) Position Limits
Non-Spot-month Position Limits
Non-Brokerage members
40,000
Unilateral open interests×20%
Clients
20,000
Unilateral open interests×10%
Non-Brokerage members
From the 10th trading day of the month immediately preceding the spot-month
5,000 2,500
9
(I) Major articles on delivery of soybean meal futures1. The delivery warehouses designated for soybean meal are divided into the delivery warehouses on par and other delivery warehouses, including warehouses and factory warehouses.
2. When the soybean meal is delivered into the warehouse for delivery, the vendor should provide to the delivery warehouse the following material:
① The manufacturer of the soybean meal;
② The manufacturing date of the soybean meal;
③ Product quality tester;
④ The certification and identification showing whether they are genetically modified products;
⑤ The photocopy of the manufacturer’s quality testing report.
3. The packages of the soybean meal should be the new woven sacks. Each package of the soybean meal must be printed with the marks of the product name, the manufacturer’s name, address and phone number, and the weight. The woven sack must be sewed with the label printed with the manufacturing date.
4. The number of the packages of the soybean meal should not be calculated. The packing prices of the woven sacks should be included in the contract trading price.
1. The delivery fee for soybean meal is 1 CNY/MT.
2. The charging standard for warehousing and dissipation costs is CNY 0.5 per day per ton.
3. The inspection fee for soybean meal is 3 CNY/MT.
4. A price ceiling is implemented for the delivery-in and delivery-out fees.
1. The delivery of soybean meal futures can be conducted in the forms of exchange of
futures for physicals (EFP), rolling delivery and one-off delivery.
2. Delivery workflows
(II) Delivery Expenses
(III) Procedures for Delivery of Soybean Meal Futures
V. Procedures and Relevant Rules for Delivery of Soybean Meal Futures
10
Flow NotesTime
Flow Chart of EFP
Before 11:30 of the
application day
After the close of the application day
After the settlement of the approval day
The positions of eligible buying and selling applicants in the opposition directions shall
be closed out at the negotiated price.
The transfer of goods and payments in EFP by other warehouse receipts shall be
negotiated and settled by both trading parties. With respect to the warehouse
receipts on par EFP, the Exchange shall handle the handover of the warehouse receipts on par and the payment of the payments. After the settlement of the
approval day, the Exchange shall pay the payments to the seller and issue the
Voucher of Warehouse Receipts On Par to the buyer.
Applications for EFP by warehouse receipts on par shall be submitted with the right amount of payment and receipts. Delivery fees of EFP by warehouse receipts on par will be
examined and approved on the very same day upon receiving of the application; Trading fees of EFP by other
warehouse receipts are examined and approved within three days upon receiving of the application. The eligible period for EFP is the time from the launch day of the contract to the third to the last trading day (including the very same
day) of the month preceding the spot-month.
Positions of EFP shall be deducted from the open interests of that very day, and the trading result shall not be counted
into the settlement price and trading volume of that very day. After ending of each trading day, the Exchange will
publish the EFP information of that very day.
Value-Added Tax invoices shall be handled according to the relevant rules in the Detailed Settlement Rules of
Dalian Commodity Exchange.
Flow NotesTime
Flow Chart of Rolling Delivery(As of the first trading day of the spot-month through the trading day immediately preceding the last trading day of the spot-month)
Trading hours on matching day
Market closing on matching day
Settlement on matching day
Liquidation after confirmation of the valid declaration intent of the buyer and
the seller.
The settlement price of the then-current day shall be the delivery settlement
price for rolling delivery and be used to calculate the profit or loss of the liquidation. The buyer’s trading
margins shall be transformed to be the delivery payments.
The buyer shall make up the payments in full before closing of the market. After settlement, the Exchange will
issue the Voucher of Warehouse Receipts On Par to the buyer without default, and pay 80% of the delivery
payments to the seller.
The seller who declares the delivery shall hold both the warehouse receipts on par and the one-way selling positions of the spot-month. The buyer who declares the delivery shall hold
the one-way buying positions of the spot-month.
If a client’s quantity of positions is smaller than that of its declaration intent, or it has both buying and selling positions
(including positions held under the same client number at other members), it declaration intent shall be invalid. If the selling
intent is smaller than the buying intent, the buying intent will be transacted with the equal selling intent according to the
declaration time sequence of the intent. If the selling intent is larger than the buying intent, the buying intent will all be
transacted and the difference will be matched with the buying positions with the longest holding time. Matched positions will
be deducted from the positions of the contract in the spot-month, and will thus neither be restricted by the position limit nor be
calculated into the trading volume.
The seller and the buyer can inquire about the corresponding Delivery Pair Table in the Member Service System and in the “data service/ statistical data” section of the website of the Exchange. The margins of the matching seller shall be returned.
Value-Added Tax invoices shall be handled according to the relevant rules in the Detailed Settlement Rules of Dalian
Commodity Exchange. The rolling delivery default refers to the buyer’s failure to fully pay the payments within the prescribed
period. Any delivery default shall be handled subject to the applicable provisions on delivery default in the Detailed Delivery
Rules of Dalian Commodity Exchange.
Settlement o n handover day (the second trading day
following the matching day)
The seller and the buyer declare the delivery.
Soybean Meal Futures Trading Manual
The seller and the buyer shall apply for EFP by submitting Application Form of
Exchange of Futures for Physicals, the physicals sale and purchase agreement, the applicable certification of the payments, the
applicable certification of the warehouse receipts on par, the entrance receipts, the
inventory receipts and other goods ownership certifications.
Note: For detailed procedures, see Detailed Delivery Rules of Dalian Commodity Exchange.
Note: For detailed procedures, see Detailed Delivery Rules of Dalian Commodity Exchange.
11
Flow NotesTime
Flow Chart of Rolling Delivery(Last trading day)
After the settlement of the
last trading day
Before 15:00 of the
last delivery day
15:00 on the last delivery day
The Exchange matches the contracts that remain open on the principle of
“Least Matched Pairs”.
The buyer shall complete the payment of commodities; the seller
shall submit all corresponding warehouse receipts on par and VAT
invoices.The Exchange shall allocate
warehouse receipts, and transfer the payments and warehouse receipts on par of the buyer and the seller who
have not defaulted.
Natural persons shall not be allowed to participate in the delivery; the offsetting positions held under the same trading code shall be closed out at the delivery settlement price; after matching, the members can
inquire about the corresponding Delivery Pair Table in the Member Service System and in the “data service/
statistical data” section of the website of the Exchange.
The seller shall issue VAT invoices to the buyer whose name is provided in the Delivery Pair Table; prices of
commodities traded in the Exchange include taxes, which is also true of prices of packaging materials.
The corresponding storage fees of the warehouse receipts on par on the very day shall be paid by the buyer. Defaults shall be handled according to the
relevant rules in Detailed Delivery Rules of Dalian Commodity Exchange.
After 15:00 of the
last delivery day
The buyer who hasn’t defaulted claims the Voucher of Warehouse Receipt with the
receiving of payment issued by the settlement department.
The seller who hasn’t defaulted and who has submitted corresponding VAT invoice gets
the full amount of payment.
Sellers who haven’t submitted VAT invoices shall be dealt with according to the Detailed Settlement Rules
of Dalian Commodity Exchange.
3. One-off Delivery
(1) DefinitionAfter the last trading day of the contract, all non-liquidated contract holders must perform the contracts through delivery; and the portions of positions corresponding to the buying and selling positions under the same client number shall be deemed to be automatically liquidated, no delivery shall be handled therefor and the liquidation price shall be calculated as per the delivery settlement price.
(2) Delivery Workflows
(3) Notes① All the products listed on the Exchange may adopt one-off delivery.② The delivery settlement price shall be the weighted average price of all transaction prices of the futures contract during the period as of the first trading day of the spot-month through the last trading day.③ The VAT special (ordinary) invoice shall be issued by the delivery selling client to the appropriate buying client; and the VAT special (ordinary) invoice issued by the client shall be forwarded, obtained, and confirmed with assistance from, the members of both parties.④ Any Member’s delay or failure in submission of the VAT special (ordinary) invoice shall be handled subject to the applicable provisions of the Detailed Settlement Rules of Dalian Commodity Exchange.
Note: For detailed procedures, see Detailed Delivery Rules of Dalian Commodity Exchange.
12
4. Delivery Comparison
EFPRolling Delivery
(As of the first trading day of the spot-month through the trading day immediately preceding the last trading day of the spot-month)
Rolling Delivery (Last trading day)
Handling time
Matching time
Matching principle
Settlement price
Main features
As of the contract listing date through the last but
three trading day (inclusive) of the month preceding the
spot-month.
Priority goes to sellers, buy positions with delivery intent, and buy positions with
longest holding time
As of the contract listing date through the last but three trading day (inclusive) of the month preceding the spot-month.As of the first trading day of the spot-month through the trading day immediately preceding the
last trading day of the spot-month
Seller priority principle: qualified sellers are ensured of successful matching on the
very day when they submit their applications. The buyers matched shall pay
on time.
Negotiated by the buyer and the seller and within the
handling period
Match after market closure of last trading day;
centralized handling of delivery by the Exchange
Negotiated by the buyer and the seller; with either
warehouse receipt on par EFP or non-standard warehouse
receipt EFP
Last trading day
After market closure of last trading day
“Least Matched Pairs”
The day when the seller submits the application for rolling delivery
Negotiated by the buyer andthe seller
Negotiated by the buyer and the seller Settlement price of the matching day Delivery settlement price
The soybean oil warehouse receipts on par of the Exchange, issued by the designated delivery warehouses, are divided into warehouse receipts on par and factory warehouse receipts on par.
Time
After market closing
Before Market Closing
Before Market Closing
Before Market Closing
Buyer Seller The ExchangeDate
Flow Chart of One-off Delivery
Last trading day
Transform the trading margins of the buying positions of the
spot-month to be the delivery advances
Publish such information as the products delivered at each delivery warehouse and the quantities of the
warehouse receipts on par
Submit to the Exchange all the warehouse receipts on par corresponding to its
spot-month
Submit the VAT special invoice within seven days after matching
Additionally pay the balance payments
corresponding to its spot-month contract
positions
Declare the delivery intent to the Exchange according to the information published by
the Exchange
The 1st trading day after the
last trading day (The day for
submitting the warehouse
receipts on par
The 2nd trading day after the last trading day
(The matching
day)
The 3rd trading day after the last trading day
(The handover
day)
After the determination of the matching result, the buyer shall, within one trading day after the matching day, notify the seller of the items related
to issuance of the VAT special invoice, including the name, address, taxpayer’s
registration number, amount and other information, in
accordance with the provisions of the tax
authorities.
Carry out delivery matching, and the matching result and other information
will be sent to the buying member and the selling member through the
member service system.
Issue to the buying member the Voucher of Warehouse Receipts
on Par
(IV) Flow of Receipts Delivered at Warehouse and Factory Warehouse
After market closing
After market closing
After market closing
Soybean Meal Futures Trading Manual
Note: For details, see Detailed Delivery Rules of Dalian Commodity Exchange.
Note: For details, see Detailed Delivery Rules of Dalian Commodity Exchange.
13
1. Flow of Warehouse and Factory Warehouse Receipts
When the futures products under the warehouse receipts on par have been transferred to be physicals or after the cash withdrawal with the Registration Application Form of Warehouse Receipts on Par, the clients will no longer need to handle the delivery forecast, though re-inspection is a must, if they want to re-generate the warehouse receipts on par at the same warehouse.
2. Flow:
Registration of warehouse receipts: The buyer pays the fees including that to purchase the soybean meal to the oil factory, which will then issue the Registration Application Form of Warehouse Receipts on Par to the seller before the Exchange allows registration upon examination of such items as the letter of guarantee.
Receipt of warehouse receipts: During the delivery, the seller issues warehouse receipts and VAT invoices and receives the payments for goods, while the buyer pays for the goods and receives the warehouse receipts.
Cancellation of warehouse receipts: Holders of warehouse receipts shall handle the procedures for cancelation of warehouse receipts at the Exchange to confirm the oil factories for picking up goods and receive the Notification of Delivery.
Goods pick-up: The vendor shall pick up the goods at the factory warehouse within 4 days from the day of issuance (inclusive) of the Notification of Delivery, and the factory warehouse shall arrange for loading out of the goods according to relevant regulations. (For details, see Measures for Warehouse Receipts on Par Management of Soybean Meal, Soybean Oil, RBD Palm Olein, Coke, Coking Coal, Iron Ore and Egg of Dalian Commodity Exchange.)
Note: All warehouse receipts on par of soybean meal must be cancelled before the last business day of each March, July and November.
Qualified
Pledge Transfer Offset
Flow of Warehouse Receipts on Par
Cancellation
Members on behalf of clients (or Non-
Brokerage members) handle warehouse
receipts on par registration at the
Delivery Department.
Plan to generate factory warehouse receipts
DCE entrusts quality testing agencies to
re-inspect.
Warehouse Inspection
Delivery-in
Delivery forecast
Plan to generate warehouse receipts
Clients entrust broker members or
Non-Brokerage member
Voucher of Warehouse Receipts
Notification of Delivery
Pick up goods at designated delivery warehouse with ID card and letter of
introductionGoods w
il be delivered within
30 days after the delivery forecast.
Warehouse or factory
warehouse issues Registration Application
Form of Warehouse
Receipts on Par.
14
Product
Trading Unit
Price Quote
Tick Size
Daily Price Limit
Contract Months
Trading Hours
Last Trading Day
Last Delivery Day
Deliverable Grades
Delivery Location
Trading Margin
Trading Fee
Delivery Method
Ticker Symbol
Exchange
Soybean Meal
10 MT/contract
CNY/MT
1 CNY/MT
4% of last settlement price
Jan, Mar, May, Jul, Aug, Sep, Nov, Dec
9:00 - 11:30 am, 1:30 - 3:00 pm Beijing Time, Monday to Friday, and other hours noticed by DCE
10th trading day of the spot-month
3rd business day after the last trading day of the spot-month
DCE Soybean Meal Delivery Quality Standard
The warehouses appointed by DCE
5% of the contract value
No more than 3 CNY/contract
Physical delivery
M
DCE
DCE Soybean Meal Futures Contract
Annex 1: DCE Soybean Meal Futures Contract
Soybean Meal Futures Trading Manual
15
DCE Soybean Meal Delivery Quality Standard(F/DCE D001-2006)
1. Content and Scope1.1 The Standard herein dictates the quality requirements, testing methods, inspection rules, labeling, packaging, transportation and storage for soybean meal futures contracts delivered at DCE.
1.2 Soybean meal dictated in DCE’s soybean meal futures contract refers to soybean meal for feeding that is produced after soybean oil extraction by way of crushing and leaching or leaching. There is no limit on production location.
1.3 The standard herein applies to soybean meal futures contracts on par delivered at the DCE.
2. Cited RulesSubject to the relevant rules of GB/T19541—2004
3. Terms and DefinitionsSubject to the relevant rules of GB/T19541—2004
4. Quality Requirements4.1 Sensory characteristics: Pale brown or light yellow irregularly shaped pieces; powder or granular; not fermented or moldy; no extruding agglomerations, moth-eaten sections, or odors/smells.
4.2 Impurities and sundries: subject to the relevant rules of GB/T 19541—2004
4.3 Quality guidelines for products on par
4.4 Sanitation standard: subject to the relevant rules of GB/T 19541—2004
5. Testing methods, inspection rules, labeling, packaging, transportation and storagePackaging: subject to the relevant rules of Detailed Delivery Rules of Dalian Commodity Exchange for Soybean Meal, Corn, Soybean Oil and No. 2 Soybean; Testing methods, inspection rules, labeling, transportation and storage: subject to the relevant rules of GB/T 19541—2004
6. Additional Notes6.1 The DCE is responsible for the interpretation of the standard herein.
6.2 The standard herein shall be implemented starting from the March contract in 2007.
Note: Crude protein, crude fiber and ash content should be calculated based on 87% dry material.
Item
Par
Moisture(%)
≤13.0
Crude Protein (%)
≥43.0
Crude Fiber (%)
≤7.0
Ash Content (%)
≤7.0
Urea activity(ammonia nitrogen)
[mg/(min.g)]
≤0.3
Annex 2: DCE Soybean Meal Delivery Quality Standard
Table 1
16
Annex 3: List of Designated Delivery Warehouses for DCE Soybean Meal
List of Designated Delivery Warehouses for DCE Soybean Meal (Factory Warehouses)
List of Designated Delivery Warehouses for DCE Soybean Meal (Warehouses)
Soybean Meal Futures Trading Manual
Name Address
Premium and Discount
(CNY/MT) Compared with
Delivery Warehouse on Par
1
2
3
0512-583880660512-58380903(F)
13906249916
ZhouQianchao
Yes
Yes
Yes
0
0
0
10000
10000
10000
226006
210012Nan jing Tiexinqiao Warehouse
Area
Nantong Grains & Oils
Transportation Warehouse Area
Railway: Nanjing South Railway
Station, Shanghai Railway Bureau
Shipping: Dock of Tiexinqiao State Grain
Reserve, Nanjing Grain Bureau,
Qinhuai New River
Shipping: Dock of Nantong Grains & Oils Transportation
Co., Ltd.
Shipping: Zhangjiagang River & Ocean Cereals and
Oils Dock
Shipment StationTel.ContactPostcode
Zhangjiagang Storage & Transportation
Department of Jiangsu River & Ocean Cereals
and Oils Trade Co., Ltd.Nantong Grains & Oils Transportation Co., Ltd.
of China Grain & Logistics Corporation
Nanjing Tiexinqiao State Grain Reserve
No.1, Wusi Jieqiao, Jin’gang Town, Zhangjiagang,
Jiangsu Province
62 Rengang Rd., Nantong, Jiangsu
Province
Wushang Village, Tiexinqiao Town,
Yuhuatai District, Nanjing, Jiangsu
Province
River & Ocean Zhangjiagang
Warehouse Area
Delivery Area
Delivery Warehouse
on Par (Yes/No)
No.
Zhang Jie
Xu Wen215634
0513-8355472713912286772
025-52890848 025-52890972(F)
13851421688
Contractual Capacity
(MT)
Note: The contractual capacity refers to the minimum guaranteed warehouse capacity in the agreement signed by the delivery warehouses with the Exchange. The actual storage of goods by a delivery warehouse may exceed the contractual capacity.
Premium and Discount
(CNY/MT) Compared with
Delivery Warehouse on Par
Delivery Warehouse
on Par (Yes/No)
Daily Delivery
Speed (MT/Day)
Maximum of Warehouse Receipts
on Par (MT)
0
0
0
0
-30
-30
-30
No
No
Yes
Yes
No
No
No
1
2
3
4
5
6
7
0769-8125747613928922223
0769-88236050(F)
0769-826617310769-88239556(F)
15622280377
0512-58389121 0512-58388235(F)
13115110095
025-84798199025-84799258(F)
13906249916
0518-8238726613971088817
0633-26390660633-2639065(F)
13561906170
0633-221607615806337544
Yang Qing
Niu Zhen
20000
12000
60000
27000
48000
12000
12000
1350
800
4000
1800
3200
800
800
523147
523147
215634
215634
222042
276808
276826Railway: Rizhao Port Shipping: Rizhao Port Container Company
Railway: Dedicated Lines at Lanshan StationShipping: Lanshan Port
Railway: 8 Dedicated Lines of No.4 Company of
Zhongyun (Ji) Port BureauShipping: No.65 Berth of
Lianyungang Port
Railway: Dedicated Line of Xinsha Port, Xiayuan Station, Guangzhou Shenzhen Railway
Railway: Dedicated Line of Xinsha Port, Xiayuan Station, Guangzhou Shenzhen Railway
Shipping: Zhangjiagang Eastsea
Oils & Grains Specialized Dock
Shipping: Zhangjiagang River & Ocean Cereals and Oils
Dock
Shandong Xinliang Oil Processing Co., Ltd.
1 Xinliang Rd., South End of Haibin No.5 Rd.,
Rizhao, Shandong Province
Gangbei, Lanshan, Rizhao, Shandong
Province
Dagang Rd., Xugou, Lianyungang, Jiangsu
Province
1 Baodao Rd., Jin’gang Town, Zhangjiagang,
Jiangsu Province
1 Donghai Rd., Jin’gang Town, Zhangjiagang,
Jiangsu Province
Science & Technology Industrial Park, Xinsha Port, Machong Town,
Dongguan, Guangdong Province
Science & Technology Industrial Park, Xinsha Port, Machong Town,
Dongguan, Guangdong Province
COFCO Yellowsea Oils & Grains Industries
(Shandong) Co., Ltd.
Yihai (Lianyungang) Grains & Oils Industries
Co., Ltd
COFCO Eastsea Oils & Grains Industries
(Zhangjiagang) Co., Ltd.
Dongguan Cargill Feeding Protein
Technology Co., Ltd.
COFCO Xinsha Grains & Oils Industry
(Dongguan) Co.,Ltd.
Name Address Postcode Contact Tel. Shipment Station
Zhu Xiongliang
Wang Yinfang
Chen Sulan
Bao Yijie
Zhangjiagang River & Ocean Cereals and Oils Industry Co., Ltd.
Xu Wen
No.
Premium and Discount
(CNY/MT) Compared with
Delivery Warehouse on Par
-30
-50
0
0
0
0
0
0
0
0
-30
-50
0
0
0
-50
-50
0
No
No
No
Yes
No
Yes
No
No
No
No
No
No
Yes
Yes
Yes
No
No
No
0633-39882800633-3988810(F)
13506336735
022-66271996022-66271988(F)
13752197872
0769-884361020769-88436011-904(F)
13802371105
0513-811933350513-85719527(F)
13921464604
0759-222702113859213090
0759-2227878(F)
0513-8596602013951302082
0769-88235178 13412562657
0769-88235181(F)
0769-826617310769-88239556(F)
15622280377
0769-826617310769-88239556(F)
15622280377
0769-88236688-11640769-88230388(F)
13829192825
0633-2166266/1680633-2166299(F)
1826332857713792028121
022-25618368/358022-25618380(F)
1851221261118512212766
0511-81996632/440511-81996630(F)
1505111686613861350613
0523-869917280523-86991319 (F)
15295279725
0523-879267690523-87926751(F)
18061888001
022-25618208022-25618209(F)
13602031376
022-59585888-166022-59855800(F)
13821904621
0769-8292244113501500286
0769-88280667 (F)
15000
45000
22500
30000
30000
37500
15000
15000
18000
18000
20250
20250
18000
30000
30000
20250
20250
22500
1000
3000
1500
2000
2000
2500
1000
1000
1200
1200
1350
1350
1200
2000
2000
1350
1350
1500
276826
300461
523166
226004
524027
226009
523147
523147
529533
523147
276826
300452
212006
225400
225404
300452
300452
523147
Delivery Warehouse
on Par (Yes/No)
Daily Delivery Speed
(MT/Day)
Maximum of Warehouse Receipts on Par (MT)
Shipment StationName Address Postcode Contact Tel.
Jin Tianyuan (Tianjin) Food Technology Co.,
Ltd.
COFCO Excel Joy (Tianjin) Co., Ltd.
Taixing Zhenhua Oils Co., Ltd.
Yihai (Taizhou) Grains & Oils Industrial Co., Ltd.
Sinograin Zhenjiang Grains & Oils Co., Ltd.
BGO (Tianjin) Grain & Oils Industrial Co., Ltd.
Chinatex Grains & Oils (Rizhao) Co., Ltd.
Sinograin Oils & Fats Industrial Dongguan Co.,
Ltd.
Cargill Grains & Oils (Yangjiang) Co., Ltd.
Dongguan Cargill Grains & Oils Co., Ltd.
Chinatex Grains & Oils (Dongguan) Co., Ltd.
Cargill Grains & Oils (Nantong) Co., Ltd.
Chinatex Grains & Oils (Zhanjiang) Co., Ltd.
Nantong Noble Grain and Protein Co., Ltd.
Dongguan Fuzhiyuan Feedstuff Protein
Development Co., Ltd.
Jiusan Group Tianjin Soybean Technology Co.,
Ltd.
Bunge Sanwei Oil & Fat Co., Ltd.
2068 Bohai No.40 Rd., Lin’gang Economic
Zone, Binhai New Area, Tianjin
510 Bohai No.40 Rd., Lin’gang Economic
Zone, Binhai New Area, Tianjin
9 Yanjiang Rd., Taixing Economic Development Zone, Jiangsu Province
North Shugang Rd., Yong’anzhou Town,
Gaogang District, Taizhou, Jiangsu
Province
Liangshan Village, Jianbi Town, Zhenjiang,
Jiangsu Province
1306 Bohai No.40 Rd., Lingang Economic
Zone, Binhai New Area, Tianjin
157 Haibin No.5 Rd., Rizhao, Shandong
Province
Xinsha Port Back Industrial Zone, Machong
Town, Dongguan, Guangdong Province
3-6 Yan’gang Avenue, Yangjiang Port,
Yangjiang, Guangdong Province
Xinsha Industrial Zone, Machong Town,
Dongguan, Guangdong Province
Xinsha Industrial Zone, Machong Town,
Dongguan, Guangdong Province
Tongxing Rd., Nantong Economic and Technological
Development Zone, Jiangsu Province
Zone 1, Port Affairs Bureau, 1 Youyi Rd.,
Xiashan District, Zhanjiang, Guangdong
Province
214 South Yuelong Rd., Nantong, Jiangsu
Province
Yinghuataiying Industrial Zone, Hongmei Town, Dongguan, Guangdong
Province
266 Xin’gang Avenue, Tianjin Port Free Trade
Zone
Haibin No.5 Rd., Rizhao Economic Development
Zone, Shandong Province
Shipping: No.10 Dock, Tianjin Port
Railway: Sanbaidun Station
Shipping: Lin’gang Grains & Oils DockRailway: Tanggu
Station
Shipping: Dock at Guochuan PortRailway: N/A
Shipping: Yihai Grains & Oils
DockRailway: N/A
Shipping: Sinograin Dock
Railway: Zhenjiang Station
Shipping: Lingang Port
Railway: Rizhao Station
Shipping: Rizhao Port
Railway: Xinsha Station
Shipping: Xinsha Port
Railway: Xinsha Station
Shipping: Xinsha Port
Shipping: Xinsha Port
Shipping: Yingchuan Port
Railway: Zhanjiang Station
Shipping: Zhanjiang Port
Shipping: Langshan Port, Nantong
Shipping: Fuzhiyuan Dock
Railway: Tianjin New Port Station
Shipping: Tianjin Port
Railway: Rizhao Station
Shipping: Rizhao Port
Shipping: Yangjiangliang Port
Liu Qian
Li Xiaohui
Cheng Linjuan
Guo Hongfeng
Zhang Jie
Ma Long
Wang Hongjie
Li Ning
Shi Wannian
Zhang Youhong
Guo Changbo
Chen Yun
Zhu Zhiguo
Tao Yuxian
Li Gang
Qin Bo
Zhang Lisong
Bao Yijie
Bao Yijie
Xu Li
Louis Dreyfus (Bazhou) Feed Protein Co., Ltd.
Science & Technology Industrial Park, Xinsha Port, Machong Town, Dongguan,
Guangdong Province
Lai Jianli
Shipping: Xinsha Port
18
19
20
21
22
23
24
25
8
9
10
11
12
13
14
15
16
17
No.
17
Annex 4: DCE Soybean Meal Price Daily Chart
DCE Soybean Meal Price Daily Chart 2012.1-2015.12
© Dalian Commodity Exchange. All rights reserved.
2012/02 2012/08 2013/02 2013/08 2014/02 2014/08days
Jan.-Apr., 2012, price of Dalian soybean meal rose steadily as American soybean production was reduced due to the drought weather in South America.
Jun.-Sep., 2012, American soybean production was cut from 87m to 71.69m tons as the U.S. suffered a dry weather never seen in the past 50 years flowing the drought in South America.
Sep.-Nov., 2012, price of Dalian soybean meal slumped as American soybeans entered a long-term bear market when effective rainfall came in the later growth period of the soybeans.
A 4-month continuous decline from May 23 to the end of Sept. 2014 ended the weather-based market speculation. Thanks to the unexpected good weather, the U.S. soybeans' yield of per unit area increased constantly. As a result, the futures price of the U.S. soybeans slumped. With the end of weather-based speculation in the previous 3 years, the global stock of soybeans saw a quick recovery.
The only strong rebound of the U.S. soybean market in 2015 came in the latter half of June. In the last 2 weeks of June 2015, the main production areas of the U.S. soybeans were stricken by excessive rainfalls, delaying sowing in some areas for a long time. The January contracts of the U.S. soybeans rebounded by 16.3% to 1,050 cents per bushel from 903 cents per bushel. However, the report of July released later did not show the sowing area was decreased due to the excessive rainfalls. The report of August, though cutting the sowing area, increased the yield per unit area of the U.S. soybeans. After that, the yield per unit area was continuously lifted, which suppressed the U.S. soybean market. China’s soybean meal market, generally synchronized with the U.S. soybean market, saw an even weaker trend.
Dalian Commodity Exchange
SOYBEAN MEAL FUTURESTRADING MANUAL
DCE Investor Education Material
Futures Trading Manual Series
DCE Investor Education MaterialFutures Trading Manual Series
Des
ign
by H
erem
ary.
com
www.dce.com.cn
Service & Consultation:
Add: 129 Huizhan Road, Dalian, Liaoning Province, China 116023
Tel: +86-411-84808888 Fax: +86-411-84808588
Trading: +86-411-84808687
Delivery: +86-411-84808655
Clearing: +86-411-84808897
Compliant: +86-411-84808888
6nd Edition, 2016
Dalian Commodity Exchange. All rights reserved.
Nothing in this document constitutes an offer or a solicitation of an offer to buy or sell any security or other financial instrument or constitutes any investment advice or recommendation of any security or other financial instrument. To the best of the DCE's knowledge and belief, statements made are correct at the time of going to press.As such statements and all opinions expressed herein are published for the general information of readers but are not to be taken as recommendations of any course of action. The DCE accepts no liability for the accuracy of any statement or representation.