February 5, 2007

 

Monday: China soybean futures up on CBOT rise; slack demand caps gains

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled higher Monday due to gains on the Chicago Board of Trade, but were held back by lackluster domestic demand.

 

The most active September 2007 contract settled up RMB49 at RMB3,179 a metric tonne.

 

Total trading volume reached 308,332 lots compared with 308,582 lots Friday. One lot is equivalent to 10 tonnes.

 

On Friday, CBOT soybean futures rallied to new contract highs in several months amid expectations that U.S. soybeans acres will be sharply reduced in the spring.

 

Pro Farmer, an agricultural newsletter, released a survey that called for U.S. corn acres in 2007 to increase by 10.9 million-to-11.8 million acres and for soybean acres to decrease by 8.6 million-to-9.4 million acres. Many previous industry estimates had called for a smaller shift.

 

Farmers are expected to plant more corn in part because of increased interest in ethanol production.

 

But soybean futures are unlikely to surge ahead of the Chinese New Year holiday in mid-February as demand isn't sufficient, said Gao Yanrong, an analyst at Dalu Futures Co. in Shanghai.

 

Farmers are still reluctant to increase their livestock population due to fears of an outbreak of diseases such as bird flu, he said.

 

China last week confirmed a new outbreak of foot-and-mouth disease in northwestern Gansu province, the second in the province this year.

 

Soymeal, the animal feed, is produced from the crushing of soybeans.

 

Soymeal and soyoil also settled higher.

 

The benchmark May 2007 soyoil contract settled RMB94 higher at RMB6,614/tonne.

 

The most active September soymeal contract settled up RMB46 at RMB2,633/tonne.

 

Corn futures settled higher, tracking the rise of soybean contracts. The benchmark September contract rose RMB7 to RMB1,717/tonne.

 

Trading volume for corn contracts totaled 260,820 lots compared with 405,968 lots Friday.