January 24, 2006

 

Tuesday: China soybean futures settle mixed; corn down slightly

 

 

Soybean futures on China's Dalian Commodity Exchange settled mixed Tuesday in pre-holiday trading.

 

The benchmark May 2006 soybean contract settled RMB4 higher at RMB2,683 a metric tonne after trading between RMB2,672/tonne and RMB2,693/tonne.

 

The total trading volume for soybean futures on the Dalian exchange rose to 177,402 lots from 174,646 lots Monday. One lot is equivalent to 10 tonnes.

 

Slight new long buying in the local market following CBOT's recovery pushed prices a little higher, but the pre-holiday retreat by both longs and shorts was evident.

 

The newly bought soybeans from the U.S. may not have an impact on the local market until it reopens in early February, because it will take time for the cargoes to arrive, analysts said.

 

Local futures markets will be closed throughout next week for the Chinese Lunar New Year holiday.

 

"If CBOT sees a recovery in the rest of the week, local market will probably follow it, but the benchmark's resistance at RMB2,700/tonne is still strong," said Liu Xinghua, an analyst with Great Wall Futures Co.

 

Soymeal futures also settled mixed, with the benchmark May 2006 contract settling RMB8 lower at RMB2,295/metric tonne after trading between RMB2,282/tonne and RMB2,317/tonne.

 

The total trading volume of soymeal futures rose slightly to 389,860 lots from 379,402 lots Monday.

 

Analysts said besides the usual pre-holiday retreat, the outbreak of China's tenth human case of bird flu weighed on the market.

 

If human cases continue to be confirmed, consumers will still be wary of consuming poultry, which would in turn impact the soymeal market, Liu Xinghua said.

 

Soymeal, a byproduct of soybeans, is usually used as animal feed in China.

 

Soyoil futures also settled lower, with the benchmark September 2006 contract shedding RMB61 to settle at RMB5,051/tonne, after trading between RMB5,008/tonne and RMB5,100/tonne.

 

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

 

The benchmark September 2006 No. 2 soybean contract settled RMB13 lower at RMB2,566/tonne, after trading between RMB2,551/tonne and RMB2,585/tonne.

 

Corn futures traded on the exchange settled slightly lower.

 

The benchmark September 2006 contract fell RMB2 to settle at RMB1,382/tonne, after trading between RMB1,378/tonne and RMB1,388/tonne.