DCE has issued a notice that it will launch the cross-products arbitrage order on Apr.18th. This is the first time for the cross-products arbitrage order based on an exchange's trading system appears in China's domestic market. According to the notice, the cross-products arbitrage order launched this time is for the arbitrage trading between specific Soybean No.1 contract and soybean meal contract as well as between the soybean oil contract and palm oil contract.
On the same day of the issue of the notice, DCE has also issued the Directions on the Use of DCE's Cross-products Order, which explains the contracts that cross-products arbitrage order can apply for, trading code of cross-products arbitrage order, minimum price fluctuation, and so on.
Wang Cheng, Analyst from Nanhua Futures Company, said that at present, there is quite strong price linkage between different varieties of soybean and between soybean oil and palm oil. The price ratios between these products are relatively stable. However, in the case when the price ratios between different products grow higher or drop lower by a large margin, then people can achieve quite secure profit through cross-products arbitrage order.