February 23, 2006

 

Thursday: China soybean futures settle lower; corn down

 

 

Soybean futures on China's Dalian Commodity Exchange settled lower Thursday, in line with losses in other local commodities futures and CBOT soybean futures.

 

The benchmark September 2006 soybean contract settled RMB27 lower at RMB2,714 a metric tonne.

 

Total trading volume rose slightly to 76,702 lots from 75,158 lots Wednesday. One lot equals 10 tonnes.

 

Open interest for all contracts rose by 1,812 lots to 270,016 lots.

 

"Speculators' retreat from other commodities, such as metals, weighed on soy futures, which are badly in need of supportive news," said Han Yan, an analyst with Dalu Futures Co. (Shanghai).

 

While local soy futures were traded without clear direction in shrinking trade, CBOT also failed to point out a clear trend, analysts said.

 

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

 

The benchmark September 2006 soymeal contract settled RMB31 lower at RMB2,340/tonne, after trading between RMB2,327/tonne and RMB2,351/tonne.

 

The benchmark September 2006 soyoil contract fell RMB18 to settle at RMB5,114/tonne, after trading between RMB5,086/tonne and RMB5,130/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 fell RMB28 to settle at RMB2,584/tonne.

 

Corn futures settled lower on long liquidation, in line with fuel oil losses, analysts said.

 

China has been adding ethanol processed from corn in car fuels in nine provinces since 2004.

 

The benchmark September 2006 contract fell RMB12 to settle at RMB1,481/tonne, after trading between RMB1,469/tonne and RMB1,492/tonne.

 

As the outlook for crude and local fuel oil futures has become bearish, corn prices are under pressure in the short term, despite the high prices in the Jilin auction, Han said.

 

China's Jinlin Grains Center was holding an auction to sell 1.25 million tonnes of old corn from local reserves Thursday.

 

Although the auction hasn't finished yet, word from the auctioneer has it that the average price is around RMB1,200/tonne, which is even higher than the price of average quality new corn at RMB1,150/tonne in Jilin.