January 8, 2007

 

Monday: China soybean futures settle mostly a tad up on CBOT rise

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly a tad higher Monday, in line with Friday's gains in Chicago Board of Trade soybean futures.

 

The most widely held May 2007 contract rose RMB4 to settle at RMB2,832 a metric tonne, after trading between RMB2,824/tonne and RMB2,843/tonne.

 

Total trading volume fell to 66,758 lots from 125,129 lots Friday.

 

One lot is equivalent to 10 tonnes.

 

Speculators chose to wait on the sidelines, waiting for further clues from CBOT, given the recent volatility in commodities prices, analysts said.

 

"We were optimistic about soybean at the end of last year, but after the holiday, the sharp losses in metals and oil have more or less impacted market sentiment," said Yu Junli, a senior analyst at Green Futures Co.

 

However, "for the longer-term, soybean should rise along with corn, given their correlation," Yu said.

 

Soymeal futures settled mostly lower, weighed down by weak cash prices, analysts said.

 

The benchmark May 2007 soymeal contract fell RMB2 to settle at RMB2,341/tonne, after trading between RMB2,331/tonne and RMB2,355/tonne.

 

"Demand for soymeal remains relatively weak, and as soyoil prices remain strong, crushers aren't keen to raise soymeal prices," said Xu Wenjie, an analyst at Tianma Futures Co.

 

Dalian's soyoil futures settled mostly higher, along with soybean and gains in CBOT soyoil futures.

 

The benchmark May 2007 soyoil contract settled RMB8 higher at RMB6,617/tonne.

 

Analysts said as China's Lunar New Year is just six weeks ahead, demand for soyoil is beginning to pick up, which will continue to underpin prices

 

Corn futures settled slightly higher, following gains in CBOT corn futures.

 

The most active September 2007 contract rose RMB4 to settle at RMB1,682/tonne, after trading between RMB1,675/tonne and RMB1,694/tonne.

 

Trading volume for all corn contracts fell to 607,868 lots from 789,562 lots Friday.

 

"Corn is likely to consolidate at the current level for some time, given the recent volatile oil prices, but for the longer-term, it has the potential to rise higher," said Yu.

 

The expanding use of corn for industrial products is irreversible, and so the grain has strong support in the long term, Yu said.