February 27, 2007

 

Tuesday: China soybean futures settle down after digesting CBOT gains

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly lower Tuesday after digesting the gains on the Chicago Board of Trade.

 

The most active September 2007 contract settled RMB5 lower at RMB3,269 a metric ton.

 

Total trading volume declined to 150,030 lots from 318,156 lots Monday. One lot is equivalent to 10 tons.

 

Domestic soybean contracts rose Monday after CBOT contracts strengthened in most of the sessions last week, when Chinese markets were closed.

 

"Now, the gains have been fully digested," said Ding Haijiang, a trader at Nanhua Futures Co.

 

A sluggish domestic stock market also added to the bearishness in the futures market

 

China shares ended sharply lower Tuesday, with the key Shanghai Composite Index posting its biggest daily fall in percentage terms in more than 10 years after it closed at a record high Monday.

 

However, soymeal and soyoil contracts settled mostly higher.

 

The most active September soymeal contract settled RMB12 higher at RMB2,767/ton, while the benchmark May 2007 soyoil contract settled up RMB10 at RMB6,576/ton.

 

Traders said soymeal futures still have room to rise as their current prices are low due to sluggish demand from feedmeal makers, while high soybean prices supported soymeal prices.

 

Soymeal, which is made by crushing soybeans, is used as animal feed.

 

Corn futures settled mostly lower, with the benchmark September corn contract settling RMB9 lower at RMB1,719/ton.

 

Trading volume for corn contracts totaled 398,552 lots compared to 870,204 lots Monday.

 

Domestic corn futures are at high levels, and are unlikely to rise any further in the near term, traders said.