February 22, 2006

 

Wednesday: China soybean futures mostly lower on CBOT; corn up

 

 

Soybean futures on China's Dalian Commodity Exchange settled mostly lower Wednesday, tracking losses on the Chicago Board of Trade.

 

The benchmark September 2006 soybean contract fell RMB25 to settle at RMB2,741 a metric tonne.

 

Total trading volume shrank to 75,158 lots from 115,680 lots Tuesday. One lot equals 10 tonnes.

 

Open interest for all contracts dropped by 7,048 lots to 268,204 lots.

 

The benchmark opened lower on the overnight CBOT losses and moved in a narrow range in thin trading.

 

Speculators expect prices will continue to stay at current levels without big fluctuations in the short run, said Shi Junfeng, an analyst with Tianma Futures Co.

 

"The market became quiet again, as last Friday's gains on CBOT were considered overdone," Shi said.

 

Soymeal and soyoil futures settled mostly lower, along with soybeans.

 

The benchmark September 2006 soymeal contract settled RMB29 lower at RMB2,371/tonne, after trading between RMB2,359/tonne and RMB2,383/tonne.

 

Total trading volume for soymeal futures fell to 352,010 lots from 587,076 lots Tuesday.

 

The benchmark September 2006 soyoil contract fell RMB13 to settle at RMB5,132/tonne, after trading between RMB5,102/tonne and RMB5,144/tonne.

 

Shi said the market seems to have more or less factored in issues such as the bird flu outbreak and the weather in South America.

 

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 RMB30 lower at RMB2,612/tonne.

 

Corn futures settled higher on fresh buying by longs.

 

The benchmark September 2006 contract rose RMB14 to settle at RMB1,493/tonne, after trading between RMB1,475/tonne and RMB1,505/tonne.

 

China's Jinlin Grains Center will auction 1.25 million tonnes of old corn from local reserves Thursday and Friday.

 

However, instead of expecting the auction to weigh on prices, industry players say strong demand is likely to push auction prices to a high level, in turn boosting the already bullish sentiment further.