March 1, 2006

 

Wednesday: China soybean futures settle mostly up on CBOT; corn down

 

 

Most soybean futures on China's Dalian Commodity Exchange settled slightly higher Wednesday, tracking small overnight gains on the Chicago Board of Trade, analysts said.

 

The benchmark September 2006 soybean contract settled RMB5 higher at RMB2,722 a metric tonne.

 

Total trading volume rose to 62,176 lots from 59,802 lots Tuesday. One lot equals 10 tonnes.

 

Open interest for all contracts fell 3,932 lots to 266,692 lots.

 

Some speculative long buying targeting short-term profits was seen during the session, but on the whole, trading was inactive, analysts said.

 

A huge soybean stock in the U.S., the expected harvest in South America, and the gradual global spread of bird flu will put pressure on prices in the mid- to long term.

 

"Meanwhile, as China imported less soybeans from the U.S. in January, CBOT prices are pressured, which in turn has an impact on local prices," said Shi Junfeng, an analyst with Tianma Futures Co.

 

Soyoil futures settled higher on fresh long buying. Crushers have reduced their operations due to low soymeal prices, which in turn has reduced soyoil supply, analysts said.

 

The benchmark September 2006 contract settled RMB60 higher at RMB5,253/tonne, after trading between RMB5,196 and RMB5,290/tonne.

 

"Soybeans and soymeal would be weaker without the spillover effect from soyoil," said Shi.

 

Soymeal futures settled mixed, with the benchmark September 2006 soymeal contract rising RMB3 to settle at RMB2,341/tonne.

 

The No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, also settled mixed.

 

The benchmark September contract rose RMB13 to settle at RMB2,601/tonne.

 

Corn futures settled mostly lower on long liquidation, with the benchmark September 2006 contract falling RMB7 to settle at RMB1,465/tonne.

 

Open interest for all contracts rose by 1,274 lots to 849,380 lots.

 

Analysts said corn futures are facing a downward correction in the short term.

 

However, physical corn prices have been rising. In Jilin, China's largest corn-producing province, the price of average quality corn with little moisture is around RMB1,170/tonne, up RMB20 from the previous week.