February 14, 2006

 

Tuesday: China soybean futures tad higher in thin trade; corn up

 

 

Soybean futures on China's Dalian Commodity Exchange settled slightly higher Tuesday in quiet trading as speculators flocked to other domestic commodities futures.

 

The benchmark September 2006 soybean contract settled RMB7 higher at RMB2,738 a metric tonne, after trading between RMB2,733/tonne and RMB2,744/tonne.

 

Total trading volume for soybean futures on the Dalian exchange further shrank to 63,384 lots from 119,752 lots Monday. One lot is equivalent to 10 tonnes.

 

"No speculator is willing to stay with soybeans any more while other commodities frequently hit limit-up or limit-down," said Shi Junfeng, a trader with Tianma Futures.

 

He said that without fresh local news and a clear price direction from the Chicago Board of Trade, speculators are exiting soybean futures, which they say will remain in a narrow range around current levels, at least in the short run.

 

Soymeal futures and soyoil futures settled higher along with soybean futures, also in thin trade.

 

The most widely held May 2006 soymeal contract settled up RMB7 at RMB2,289/tonne, while the benchmark September 2006 soyoil contract rose RMB12 to settle at RMB5,077/tonne.

 

Traders said they are looking at the weather in South America, and will also wait till March and see what happens when the chick population on Chinese poultry farms increases.

 

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

 

The benchmark September 2006 No. 2 soybean contract settled up RMB15 at RMB2,592/tonne, after trading between RMB2,577/tonne and RMB2,600/tonne.

 

Meanwhile, corn futures settled mostly higher. The benchmark September 2006 contract rose RMB1 to settle at RMB1,462/tonne, after trading between RMB1,456/tonne and RMB1,468/tonne.

 

The total trading volume shrank to 538,812 lots from 826,204 lots Monday.

 

Despite the fresh purchases, analysts doubt whether the current price level is reasonable, with spot prices not catching up.