January 30, 2007

 

Tuesday: China soybean futures down on CBOT; market eyes corn prices

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled lower Tuesday, following a decline on the Chicago Board of Trade, while the market is looking to corn futures for a sense of direction amid a lack of fresh news.

 

The most active September 2007 contract settled RMB11 lower at RMB3,064 a metric tonne.

 

Total trading volume fell to 52,976 lots versus 60,554 lots Monday. One lot is equivalent to 10 tonnes.

 

"The soybean (market) is watching the trend of the corn (market)," said Dong Liang, an analyst at Shanghai Jiuheng Futures Co.

 

Amid a lack of fresh supportive news, Chicago Board of Trade soybean futures closed lower overnight for the fourth trading session in a row, suffering from spillover pressure from the neighboring corn market.

 

Soyoil futures and soymeal futures settled mostly lower.

 

The benchmark May 2007 soyoil contract settled RMB26 lower at RMB6,400/tonne.

 

The most active September soymeal contract settled RMB25 lower at RMB2,554/tonne.

 

Corn futures settled lower, with the benchmark September contract settling down RMB6 at RMB1,700/tonne.

 

If the benchmark March corn futures on CBOT fail to stay above the $4.00 a bushel mark, domestic agricultural products futures are likely to fall a little further, said Dong.

 

March corn on CBOT ended 5 1/2 cents lower at $4.00/bushel overnight.

 

But Zhang Yifan, a trader at China Grains & Oils Group Feed Corp., expects the September corn contract to fell below RMB1,650/tonne around the Spring Festival as farmers are still holding a large amount of stock and won't keep it for a long time.

 

Trading volume for corn contracts totaled 677,246 lots compared with 462,612 lots Monday.