February 8, 2006

 

Wednesday: China soybean futures settle sharply lower; corn limit-down

 

 

Soybean futures on China's Dalian Commodity Exchange settled sharply lower Wednesday on long liquidation, spurred by losses in other commodities futures, analysts said.

 

The benchmark May 2006 soybean contract settled RMB89 lower at RMB2,641 a metric tonne after trading between RMB2,621/tonne and RMB2,690/tonne.

 

The total trading volume for soybean futures on the Dalian exchange rose to 342,928 lots from 196,818 lots Tuesday. One lot is equivalent to 10 tonnes.

 

"Losses in other commodities, both at home and abroad, triggered the selling, given bearish fundamentals for soybeans," said Tang Yi, an analyst at Capital Futures Co.

 

Lingering bird flu concerns weighed on prices, but prices are already high enough, Tang said, especially in view of the oversupply situation.

 

Soymeal and soyoil futures tracked soybean futures to settle sharply lower on long liquidation.

 

The benchmark May 2006 soymeal contract fell RMB79 to settle at RMB2,287/tonne. It hit limit-down in the afternoon session and ended at RMB2,272/tonne.

 

The benchmark September 2006 soyoil contract fell RMB78 to settle at RMB5,076/tonne, after trading between RMB4,970/tonne and RMB5,106/tonne.

 

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

 

The benchmark September 2006 No. 2 soybean contract settled RMB59 lower at RMB2,579/tonne, after trading between RMB2,533/tonne and RMB2,621/tonne.

 

"I don't see fundamentals changing much in the following month, so neither will (futures) prices," Tang said.

 

Meanwhile, corn futures settled lower on long liquidation.

 

The benchmark September 2006 contract fell RMB43 to settle at RMB1,465/tonne. It hit limit-down at RMB1,448/tonne in the afternoon session, and remained at that level until trading ended.

 

This is clearly a downward correction after the benchmark hit an all-time high Tuesday, analysts said.

 

China reported a new bird flu case in Shanxi province Tuesday night, after 15,000 fowl were found dead from Feb. 2-3. So far, more than 187,000 birds have been culled in the area.