January 26, 2007

 

Friday: China soybean futures down; market eyes s America harvest season

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly lower Friday, tracking losses in Chicago Board of Trade soybean futures and amid expectations for the coming harvest season in South America.

 

The most active September 2007 contract settled RMB16 lower at RMB3,064 a metric tonne.

 

Total trading volume fell to 77,074 lots versus 97,680 lots Thursday. One lot is equivalent to 10 tonnes.

 

"People are delaying their purchases and waiting for cheaper prices ahead of the harvest in South America," said Larry Li, an analyst at China Derain Inc., a consultancy firm in Beijing.

 

Some newly harvested South American soybeans will start being shipped to global markets around February, while a large amount of soybeans will be transported in March, he said.

 

CBOT soybean futures ended with modest losses overnight amid long liquidation and a lack of supportive news to attract fresh buying.

 

Soymeal futures and soyoil futures settled mostly lower.

 

The most active September soymeal contract settled RMB10 lower at RMB2,577/tonne.

 

The benchmark May 2007 soyoil contract settled RMB112 lower at RMB6,494/tonne.

 

Declining crude oil prices overnight pressured prices of soyoil, which can be used to produce biodiesel, a processed fuel that can be used as a replacement for petroleum-based diesel fuel, said Gu Jianjun, a trader at Jinyuan Futures Co.

 

Corn futures settled lower, as the market expects farmers to grow more corn this year due to its high prices, said Li.

 

The benchmark September contract settled RMB8 lower at RMB1,700/tonne.

 

Trading volume for corn contracts totaled 861,594 lots, compared with 791,962 lots Thursday.