January 16, 2007

 

Tuesday: China soybean futures fall on sluggish domestic demand  

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday, largely because of sluggish demand for soybean products on China's cash markets and increased import volumes the past several days.

 

While the Dalian Commodity Exchange normally closely tracks Chicago Board of Trade soybean and corn futures, the U.S. market's closure Monday due to a public holiday pushed domestic concerns to the fore.

 

Soymeal demand has been sluggish as poultry farmers are reluctant to raise poultry production, despite China's approaching Spring Festival, on bird flu concerns.

 

Soy oil demand has also been weak as crushers have sufficient inventories.

 

Soybean imports have been higher last week at 6-8 cargoes compared with 1-2 cargoes the previous week.

 

The benchmark May 2007 soybean contract settled RMB20 lower at RMB2,920 a metric tonne.

 

Total trading volume reached 148,130 lots versus 67,466 lots Friday.

 

One lot equals 10 tonnes.

 

The benchmark May 2007 soymeal contract gained RMB9 to settle at RMB2,428/tonne, while the benchmark May 2007 soyoil contract settled RMB82 lower at RMB6,709/tonne.

 

For corn, the most active September 2007 contract fell RMB5 to settle at RMB1,764/tonne.