January 12, 2007
Friday: China soybean futures settle slightly lower, corn up
Soybean futures traded on the Dalian Commodity Exchange settled lower on pre-weekend long liquidation Friday, amid weak sentiment for domestic cash prices.
The decline came despite overnight gains in Chicago Board of Trade soybean futures.
The most widely held May 2007 contract settled RMB10 lower at RMB2,828 a metric tonne, after trading between RMB2,820/tonne and RMB2,843/tonne.
Total trading volume fell to 59,466 lots from 70,404 lots Thursday.
One lot is equivalent to 10 tonnes.
"The thin volume exacerbated the price movements, but overall sentiment wasn't good, and people stayed on the sidelines," said Gao Yanrong, an analyst at Dalu Futures Co.
"After the year-end strong rally on corn and wheat, soybean prices now fail to find strong support, and are likely to consolidate at this level," Gao said.
Falling cash prices on weak soymeal and soyoil demand will continue to cap soybean prices, analysts said.
Soymeal and soyoil futures settled lower, in line with soybean futures.
The benchmark May 2007 soymeal contract fell RMB10 to settle at RMB2,327/tonne, after trading between RMB2,318/tonne and RMB2,341/tonne.
The benchmark May 2007 soyoil contract settled RMB43 lower at RMB6,572/tonne.
Dalian's corn futures settled higher just slightly, as the strong gains on CBOT overnight were offset by the losses in soybeans, analysts said.
The most active September 2007 contract gained RMB9 to settle at RMB1,703/tonne, after trading between RMB1,694/tonne and RMB1,715/tonne.
Trading volume for all corn contracts fell to 747,570 lots from Thursday's 1,009,858 lots.
"CBOT corn gained strongly last night, but as the USDA report is due to be released tonneight, domestic speculators thought it would be better to wait and see," said Zeng Xuezhou, an analyst at Beite Futures Co.
Zeng added that "the sharp fall of oil prices also clouded market sentiment," as demand for ethanol is likely decline, if oil prices fall further.
