February 16, 2006

 

Thursday: China soybean futures mixed in thin trade; corn mostly up

 

 

Soybean futures on China's Dalian Commodity Exchange settled mixed Thursday in a lackluster market.

 

Trading was thin, apparently impervious to the big losses seen in other commodities futures at home and abroad.

 

The benchmark September 2006 soybean contract settled RMB4 lower at RMB2,727 a metric tonne, after trading between RMB2,715/tonne and RMB2,740/tonne.

 

Total trading volume for soybean futures on the Dalian exchange rose to 78,740 lots from 47,212 lots Thursday.

 

Open interest for all contracts slightly fell to 303,026 lots from 308,508 lots Tuesday. One lot is equivalent to 10 tonnes.

 

Dalian's soybean futures hasn't seen any active trading in the past week, as investors have turned to other commodities markets.

 

A seasonally slack spot market after the Lunar New Year break has also taken the shine off trading.

 

CBOT hasn't given any clear direction either, analysts said.

 

Soymeal futures settled mostly lower on new short postions, with the most active September 2006 soymeal contract down RMB2 at RMB2,357/tonne.

 

Soyoil futures settled slightly higher on new long buying, and the benchmark September 2006 soyoil contract rose RMB11 to RMB5,079/tonne.

 

"As soymeal consumption drops to the lowest point of the year, fewer crushers in operation have resulted in a decline of soyoil production. However, consumers' demand for soyoil doesn't drop that much," said Liu Xinghua, an analyst with Great Wall Futures Co.

 

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 RMB4 higher at RMB2,592/tonne, after trading between RMB2,580/tonne and RMB2,618/tonne.

 

Corn futures settled mostly higher on new long buying, after an active trading session.

 

The benchmark September 2006 contract rose RMB16 to settle at RMB1,481/tonne, after trading between RMB1,470/tonne and RMB1,489/tonne.

 

Total trading volume rose to 901,952 lots from 506,364 lots Wednesday. Total open interest for corn contracts rose to 721,174 lots from 707,346 lots Wednesday.

 

Liu said that as speculators are eyeing at long-term gains, they aren't afraid of buying at what are already high prices.