February 15, 2006

 

Wednesday: China soybean futures mixed in thin trade; corn mixed

 

 

Soybean futures on China's Dalian Commodity Exchange settled mixed Wednesday after another quiet day, with investors sidelined amid a lack of clear direction from international markets and local developments.

 

The benchmark September 2006 soybean contract opened unchanged and slightly fell due to some fresh short positions. It settled RMB7 lower at RMB2,731 a metric tonne, after trading between RMB2,725/tonne and RMB2,739/tonne.

 

Total trading volume for soybean futures on the exchange further shrank to 47,212 lots from 63,384 lots Tuesday.

 

Open interest for all contracts rose slightly to 308,508 lots from 308,092 lots Tuesday. One lot is equivalent to 10 tonnes.

 

"Without fresh local news or a clear CBOT trend, most investors these days are adopting a wait-and-see attitude in such a boring market," said a Beijing-based analyst.

 

She said that although bird flu is still a concern, it won't weigh on prices much if there are no constant reports of outbreaks.

 

Analysts said prices are unlikely to rise much given an oversupplied market. But prices unlikely to fall much as well, given a supportive spot market. Such conditions are expected to persist until the end of February.

 

Soymeal futures and soyoil futures settled mixed along with soybean futures.

 

The most widely held May 2006 soymeal contract settled RMB2 lower at RMB2,287/tonne, while the benchmark September 2006 soyoil contract fell RMB9 to settle at RMB5,068/tonne.

 

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

 

The benchmark September 2006 No. 2 soybean contract settled RMB4 lower at RMB2,588/tonne, after trading between RMB2,579/tonne and RMB2,601/tonne.

 

Corn futures also settled mixed. The benchmark September 2006 contract rose RMB3 to settle at RMB1,465/tonne, after trading between RMB1,456/tonne and RMB1,479/tonne.

 

Total trading volume rose to 506,364 lots from 538,812 lots Tuesday. Overall open interest for corn contracts rose to 707,346 lots from 692,622 lots.

 

"Although we still see new long buying in the benchmark contract, we think it's facing a downward correction. But support will be strong at RMB1,400/tonne," said the Beijing-based analyst.