February 26, 2007

 

Monday: China soybean futures settle higher; catching up to CBOT gains

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled higher Monday, catching up with gains in soybean contracts on the Chicago Board of Trade.

 

The most active September 2007 contract settled RMB88 higher at RMB3,274 a metric tonne.

 

Total trading volume rose to 318,156 lots from 121,348 lots on Feb. 16, the last trading session before the Chinese New Year holiday. One lot is equivalent to 10 tonnes.

 

CBOT contracts rose in most of the sessions last week, when Chinese markets were closed.

 

Zhang Yifan, a trader at China Grains & Oils Group Feed Corp., expects the May soybean contract on CBOT, which finished 6.5 cents lower at $7.94 a bushel Friday, to rise to $8.15/bushel within two weeks, supporting domestic prices.

 

Soymeal and soyoil contracts also settled higher.

 

The most active September soymeal contract settled RMB83 higher at RMB2,755/tonne, while the benchmark May 2007 soyoil contract settled up RMB76 at RMB6,566/tonne.

 

Despite sluggish demand from the feeding sector, high soybean prices supported soymeal prices.

 

Soymeal is the byproduct of crushed soybean, and is mainly used as animal feed.

 

Corn futures settled higher, with the benchmark September corn contract settling RMB28 higher at RMB1,728/tonne.

 

Trading volume for corn contracts totaled 870,204 lots compared with 170,406 lots on Feb. 16.

 

But corn futures may be under pressure from a possible fall in cash prices, said analysts.

 

Farmers are likely to speed up the pace of sales due to warmer weather, while the stocks are still sufficient, they said.