February 6, 2006

 

Monday: China soybean futures settle sharply up; corn limit-up

 

 

Soybean futures on China's Dalian Commodity Exchange settled sharply higher Monday after the week-long break, tracking last week's rally on CBOT, analysts said.

 

The benchmark May 2006 soybean contract settled RMB81 higher at RMB2,774 a metric tonne after trading between RMB2,747 and RMB2,796/tonne.

 

The total trading volume for soybean futures on the Dalian exchange rose to 406,810 lots from 133,218 lots Jan. 27, the last trading day before the week-long Chinese Lunar New Year holiday. One lot is equivalent to 10 tonnes.

 

But analysts said trading wasn't that active compared with a normal trading day, indicating that investors had adopted a wait-and-see stance during the session, after all contracts opened higher.

 

"The domestic fundamentals, supply and demand, don't support the prices to rise further," said Green Futures analyst Yu Junli. "Today's rise was just following the overseas rally last week."

 

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

 

The benchmark September 2006 No. 2 soybean contract settled RMB93 higher at RMB2,665/tonne, after trading between RMB2,640 and RMB2,674/tonne.

 

Soymeal futures also settled sharply up, with the benchmark May 2006 contract rising RMB83 to settle at RMB2,403/tonne after trading between RMB2,387 and RMB2,412/tonne.

 

Soyoil futures settled sharply up along with soymeal. The benchmark September 2006 contract rose RMB106 to settle at RMB5,214/tonne, after trading between RMB5,150 and RMB5,236/tonne.

 

Analysts said the rise of soy products can also be attributed to global bullish sentiment in the commodities market and spillover effects from local fuel oil and copper futures.

 

Meanwhile, corn futures settled limit-up Monday after aggressive buying in the morning session.

 

The benchmark September 2006 contract rose RMB54 to settle at RMB1,493/tonne, its all-time high.

 

Analysts said corn's use as a raw material to produce ethanol, which is being promoted by the government, will drive up prices further in the long run, against the background of high oil prices.