January 10, 2006

 

Tuesday: China soybean futures settle lower on CBOT; corn down

 

 

Soybean futures on China's Dalian Commodity Exchange settled lower Tuesday on overnight losses in soybean futures on the Chicago Board of Trade.

 

The benchmark May 2006 soybean contract settled RMB19 lower at RMB2,724 a metric tonne, after trading between RMB2,710/tonne and RMB2,735/tonne.

 

The total trading volume for soybean futures on the Dalian exchange dropped to 275,436 lots from 283,182 lots Monday. One lot is equivalent to 10 tonnes.

 

The benchmark moved in a narrow range throughout the day.

 

"Without fresh news, neither the longs nor the shorts play the leading role these days," said Qiu Han, an analyst with Yinhe Futures Co.

 

Soymeal futures mostly settled lower, with the benchmark May 2006 contract down RMB18 at RMB2,375/tonne, after trading between RMB2,360/tonne and RMB2,392/tonne.

 

The total trading volume of soymeal futures dropped to 564,566 lots from Monday's 833,766 lots.

 

Soyoil futures, on their second day of trading, mostly settled lower, dragged down by soybean and soymeal prices, analysts said.

 

The benchmark September 2006 contract settled RMB81 lower at RMB5,083/tonne, after trading between RMB5,050/tonne and RMB5,108/tonne.

 

The total trading volume of soyoil futures dropped to 82,792 lots from Monday's 138,638 lots. One lot is equivalent to 10 tonnes.

 

"The price movements show soyoil futures, although they are new contracts, have a good market foundation as soybean and soymeal have already been traded for a long time," said Xu Yulan, an analyst with Yong'an Futures Co. "Thus its price is able to reflect spot prices."

 

Xu said soybean and soy product futures are likely to stay range-bound in the next couple of days.

 

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

 

The most heavily traded September 2006 No. 2 soybean contract settled RMB19 lower at RMB2,712/tonne, after trading between RMB2,692/tonne and RMB2,728/tonne.

 

Corn futures traded on the exchange settled mostly lower.

 

The most widely held September 2006 contract was down RMB4 at RMB1,385/tonne, after trading between RMB1,380/tonne and RMB1,392/tonne.

 

"The high prices on the spot market will soon correct, and so will the futures prices," Xu said.

 

Xu said that although the purchasing prices at producing areas are high, those in major consuming areas haven't risen in response. This means the high prices aren't backed by fundamentals.

 

China reported that a six-year-old boy in central Hunan province had become the country's eighth human case of bird flu late Monday. Analysts said such "sporadic cases" don't seem to have a great impact on the market.