February 21, 2006

 

Tuesday: China soybean futures mostly lower in thin trade; corn down

 

 

Soybean futures on China's Dalian Commodity Exchange settled mostly lower Tuesday in thin trade amid ongoing bird flu concerns and a continued lull in demand after Chinese New Year.

 

Analysts said investors also kept to the sidelines because of a lack of direction from international markets. The Chicago Board of Trade was closed Monday.

 

The benchmark September 2006 soybean contract fell RMB14 to settle at RMB2,766 a metric tonne.

 

Total trading volume for soybean futures on the Dalian exchange rose slightly to 115,680 lots from 101,364 lots Monday. One lot equals 10 tonnes.

 

Soybean futures have been sluggish since the market reopened Feb. 6, after large numbers of poultry were culled for Chinese New Year.

 

Also, investors are still concerned about outbreaks of bird flu in China. The country has reported 33 outbreaks in poultry and has culled millions of birds. Agriculture Minister Du Qinglin said Tuesday that China should brace for a likely large-scale bird-flu outbreak in Spring.

 

Soymeal futures also settled lower, with long liquidation outpacing short covering as stocks remained high.

 

The benchmark September 2006 soymeal contract settled RMB20 lower at RMB2,400/tonne, after trading between RMB2,383/tonne and RMB2,426/tonne.

 

Total trading volume for soymeal futures rose to 587,076 lots from 549,370 lots Monday.

 

"The increasing local stocks due to shrinking post-holiday demand put pressure on prices," said Lin Hui, an analyst with China International Futures (Shanghai).

 

Most soyoil futures settled lower because of the spillover effect from other soy products, analysts said.

 

The benchmark September 2006 soyoil contract fell RMB22 to settle at RMB5,145/tonne, after trading between RMB5,122/tonne and RMB5,172/tonne.

 

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

 

The benchmark September 2006 No. 2 soybean contract settled RMB8 lower at RMB2,642/tonne.

 

Corn futures settled slightly lower, still facing downward correction pressure as spot market prices are still below futures levels, analysts said.

 

The benchmark September 2006 contract edged down RMB1 to settle at RMB1,479/tonne, after trading between RMB1,472/tonne and RMB1,488/tonne.