January 13, 2006

 

Friday: China soybean futures settle lower on CBOT; corn mixed

 

 

Soybean futures on China's Dalian Commodity Exchange mostly settled lower Friday on losses in soybean futures on the Chicago Board of Trade, analysts said.

 

The benchmark May 2006 soybean contract settled RMB29 a metric tonne lower at RMB2,653/tonne, after trading between RMB2,642/tonne and RMB2,663/tonne.

 

Total trading volume rose slightly to 229,194 lots from 212,992 lots Thursday. One lot is equivalent to 10 tonnes.

 

The benchmark opened lower on CBOT losses and continued to move in a narrow range throughout the day, as traders stayed on the sidelines.

 

"The market has been retreating for a few days, and had expected the results of the USDA report (Thursday). That's why prices didn't drop much in the day," said Shi Junfeng, an analyst with Tianma Futures Co.

 

Soymeal futures settled lower, with the benchmark May 2006 contract settling RMB36 lower at RMB2,301/tonne, after trading between RMB2,290/tonne and RMB2,314/tonne.

 

Total trading volume of soymeal futures fell to 471,296 lots from 493,632 lots Thursday.

 

"Shorts were reluctant to buy because of the current prices, which are considered to be low, while longs didn't see any strong fundamentals that would support a price rise," Shi said. "So speculators mainly focused on intraday movements."

 

The market is adopting a wait-and-see attitude, Shi said, adding that "to be frank, we don't know what we're waiting for."

 

Soyoil futures were also pressured lower by soybean and soymeal prices.

 

The benchmark September 2006 contract settled RMB37 lower at RMB5,044/tonne, after trading between RMB5,032/tonne and RMB5,080/tonne.

 

Total trading volume of soyoil futures fell to 66,860 lots from 79,622 lots Thursday. One lot is equivalent to 10 tonnes.

 

Traders are still undecided over the performance of soyoil futures, which trading for the first time Monday on the Dalian exchange.

 

Most traders said they prefer to wait until the delivery of the first contract, in order to decide whether to invest in the contracts.

 

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

 

The most heavily traded September 2006 No. 2 soybean contract settled RMB47 lower at RMB2,621/tonne, after trading between RMB2,600/tonne and RMB2,635/tonne.

 

Corn futures traded on the exchange settled mixed.

 

The most widely held September 2006 contract settled RMB5 lower at RMB1,367/tonne, after trading between RMB1,362/tonne and RMB1,374/tonne.

 

Corn futures are facing a short-term correction, which began in early January after rising since the end of November, analysts said.