February 10, 2006

 

Friday: China soybean futures slightly up on CBOT; corn mixed

 

 

Soybean futures on China's Dalian Commodity Exchange settled slightly higher Friday on overnight gains in soybean futures on the Chicago Board of Trade, traders said.

 

The most-widely held May 2006 soybean contract settled RMB9 higher at RMB2,653 a metric tonne after trading between RMB2,632/tonne and RMB2,680/tonne.

 

The total trading volume for soybean futures on the Dalian exchange rose to 195,958 lots from 128,706 lots Thursday. One lot is equivalent to 10 tonnes.

 

The benchmark opened higher on CBOT gains, but ended in negative territory in the morning session due to long liquidation, tracking the fall in other local commodities futures, traders said.

 

"But short covering drove up the price in the afternoon session, indicating a strong technical support at RMB2,600/tonne," said Zeng Xuezhou, a soy analyst with Beite Futures Co.

 

Investors are likely to remain sidelined for another two weeks unless fresh news emerges, as the month after the Chinese New Year is the quietest, analysts said.

 

Most soymeal futures settled slightly lower, with the most-widely held May 2006 soymeal contract settling down RMB4 at RMB2,281/tonne.

 

The total trading volume for soymeal futures rose to 455,188 lots from 320,748 lots Thursday.

 

Soyoil futures also settled mixed. The benchmark September 2006 soyoil contract rose RMB19 to settle at RMB5,090/tonne.

 

Speculators are selling soymeal and buying soyoil, as the former is more likely to be impacted by bird flu, while the latter is supported by the concept of developing renewable energy, Zeng said.

 

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

 

The benchmark September 2006 No. 2 soybean contract settled RMB27 higher at RMB2,603/tonne, after trading between RMB2,551/tonne and RMB2,620/tonne.

 

Meanwhile, corn futures settled mixed. The benchmark September 2006 contract fell RMB3 to settle at RMB1,478/tonne, after trading between RMB1,449/tonne and RMB1,505/tonne.

 

"Corn futures could correct lower on long liquidation, after hitting record highs this week," Zeng said.