February 7, 2007
Wednesday: China soybean futures down in consolidation; lack of news
Soybean futures traded on China's Dalian Commodity Exchange settled lower Wednesday as the market consolidated following a recent rise.
The most active September 2007 contract settled RMB3 lower at RMB3,167 a metric tonne.
Total trading volume reached 197,760 lots, down from 248,222 lots Tuesday. One lot equals 10 tonnes.
"There is a lack of incentive news to support the market," said Xu Wenjie, an analyst at Tianma Futures Co.
Soybean contracts on the Chicago Board of Trade ended lower overnight on profit-taking, putting pressure on the domestic market.
Trading on CBOT was somewhat range-bound during the session as market participants were looking ahead to Friday's scheduled release of a U.S. Department of Agriculture supply/demand report. The report will include a new estimate of U.S. soybean ending stocks.
But Xu said the report is unlikely to have much impact on the market, as stocks are estimated at historically high levels, despite a possible slight downward revision.
Soyoil futures settled mostly lower, with the benchmark May 2007 soyoil contract falling RMB30 at RMB6,596/tonne.
But soymeal futures settled mostly higher, as stocks are at low levels due to the slow recovery of the livestock breeding industry. Soymeal is used as animal feed.
The most active September soymeal contract settled up RMB6 at RMB2,640/tonne.
Corn futures settled mixed, with pressure coming from sluggish cash prices.
China's corn prices in major producing regions were slightly lower in the week to Wednesday, as supply increased while demand thinned.
Corn processing plants face tight cashflow because they had purchased too much earlier, while farmers are keen to release their stocks ahead of the commencement of spring plowing at the end of March.
The benchmark September contract rose RMB1 to RMB1,714/tonne.
Trading volume for corn contracts totaled 293,498 lots, compared with 241,678 lots Tuesday.
