February 6, 2007

 

Tuesday: China soybean futures down on technical correction

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly lower Tuesday on a technical correction, but with the fall expected to be brief amid concerns that soybeans will lose out on millions of acres in the U.S. that will be planted with corn instead this spring.

 

The most active September 2007 contract settled RMB9 lower at RMB3,170 a metric tonne.

 

Total trading volume reached 248,222 lots, lower than 308,332 lots Monday. One lot equals 10 tonnes.

 

The sluggish demand from the animal breeding industry has also put pressure on futures prices, said analysts.

 

Chinese farmers have been reluctant to increase their livestock due to concerns over disease outbreaks, including bird flu.

 

Meanwhile, growth in the breeding industry is likely to drop as China's economic growth is expected to slow down from 10.7% in 2006, said Ding Haijiang, an analyst with Nanhua Futures Co.

 

Corn and soymeal, produced from the crushing of soybeans, can be used as animal food.

 

Soyoil futures settled mixed, with the benchmark May 2007 soyoil contract RMB12 higher at RMB6,626/tonne.

 

However, soymeal futures settled slightly higher, catching up with the recent rise in soybean.

 

The most active September soymeal contract settled up RMB1 at RMB2,634/tonne.

 

Corn futures settled mostly lower. The benchmark September contract fell RMB4 to RMB1,713/tonne.

 

Trading volume for corn contracts totaled 241,678 lots, compared with 260,820 lots Monday.