January 4, 2006

 

Wednesday: China soybean futures settle sharply higher on CBOT gains

 

 

Soybean futures on China's Dalian Commodity Exchange settled sharply higher Wednesday after CBOT soybeans rallied to a fresh high, said analysts.

 

The benchmark May 2006 soybean contract settled RMB89 higher at RMB2,775 a metric tonne after trading between RMB2,745 and RMB2,793/tonne.

 

The total trading volume for soybean futures on the exchange rose to 369,884 lots from 234,132 lots Friday. One lot is equivalent to 10 tonnes.

 

Markets in China were closed Monday and Tuesday for New Year's celebrations.

 

The benchmark contract opened higher at RMB2,750 and hit a two-month high of RMB2,784 at the end of the first half-hour of trading, rising further to RMB2,793 just before the market closed.

 

"It is CBOT's (overnight) rally that drove today's price up. Moreover, as the dollar extended its slide in Asia Wednesday, it also pushed up commodities prices," said Han Yan, an analyst with Dalu Futures Co.

 

Soybean futures on the Chicago Board of Trade ended higher Tuesday, rallying to a new high, buoyed by a technical-buying push and concerns over heat and dryness in soybean-growing areas in Argentina.

 

Han said the price on the first trading day of the new year will likely set the tonnee for the market in the short term.

 

Soymeal futures settled higher along with soybeans, with the benchmark May 2006 contract settling RMB77 higher at RMB2,397/tonne after trading between RMB2,375 and RMB2,412/tonne.

 

The total trading volume for soymeal futures rose to 516,394 lots, from 384,254 lots Friday.

 

The decrease of stocks at feed processing enterprises as bird flu outbreaks ease in the country will further support prices, said Shi Junfeng, an analyst with Tianma Futures Co.

 

Moreover, the prices are buoyed by rising transportation costs as Chinese Lunar New Year is approaching, Shi added.

 

Dalian's No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, also settled higher.

 

The most heavily traded September 2006 No. 2 soybean contract settled RMB84 higher at RMB2,763/tonne, after trading between RMB2,730 and RMB2,786/tonne.

 

Corn futures traded on the exchange settled higher, with a bigger trading volume compared with Friday.

 

The most widely held September 2006 contract rose RMB23 to settle at RMB1,391/tonne, after trading between RMB1,385 and RMB1,399/tonne.