February 28, 2007

 

Wednesday: China soybean futures settle down on CBOT,short term correction

 

 

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

 

But the fall is forecast to be brief, as the area planted to soybean is expected to decline globally this year, traders and analysts said.

 

The most active September 2007 contract settled RMB50 lower at RMB3,219 a metric tonne.

 

Total trading volume rose to 179,870 lots from 150,030 lots Tuesday. One lot is equivalent to 10 tonnes.

 

"The overall (optimistic) market sentiment hasn't changed," said Xu Wenjie, an analyst at Tianma Futures Co.

 

CBOT soybean futures closed sharply lower Tuesday in a corrective break from recent gains, and amid fund liquidation.

 

The U.S. soybean market is overbought after strong gains last week, traders and analysts said.

 

However, Xu said the fall in soybean futures is likely to be brief, and the market is expected to rebound before the U.S. Department of Agriculture issues its prospective plantings report for the 2007-08 marketing year on March 31.

 

There is widespread expectation in the market that farmers will grow more corn at the expense of soybean, due to higher corn prices.

 

Soymeal and soyoil contracts also settled mostly lower.

 

The most active September soymeal contract settled RMB52 lower at RMB2,715/tonne, while the benchmark May 2007 soyoil contract settled down RMB60 at RMB6,516/tonne.

 

Corn futures settled lower, with the benchmark September corn contract settling RMB19 lower at RMB1,700/tonne.

 

Trading volume for corn contracts totaled 690,038 lots, compared to 398,552 lots Tuesday.

 

Analysts expect corn futures prices to be under pressure in the near term, as stocks are ample but demand from the feedmeal manufacturing sector remains sluggish.