March 1, 2007

 

Thursday: China soybean futures settle up on CBOT gains; correction seen

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled higher Thursday, tracking gains on the Chicago Board of Trade.

 

The most active September 2007 contract settled RMB17 higher at RMB3,236 a metric tonne.

 

Total trading volume rose to 186,044 lots from 179,870 lots Wednesday. One lot equals 10 tonnes.

 

CBOT soybean futures ended higher overnight on a recovery from heavy losses the previous day.

 

Some market participants were hesitant to sell ahead of the U.S. Department of Agriculture's outlook forum Thursday and Friday, where modest adjustments to U.S. corn balance sheet projections are expected to come out.

 

Long-term concerns over the potential loss of soybean acres to corn this spring due to high corn prices are providing strong support to soybean futures prices, said Tianqi Futures analyst Ma Mingwang.

 

However, he expects soybean prices to be under pressure in the near term as the soybean harvest in South America is going smoothly.

 

A large amount of soybean is expected to arrive in China from

 

Soymeal and soyoil contracts also settled higher.

 

The most active September soymeal contract settled RMB14 higher at RMB2,729/tonne, while the benchmark May 2007 soyoil contract settled up RMB22 at RMB6,538/tonne.

 

Corn futures settled higher, following gains on CBOT.

 

The benchmark September corn contract settled RMB12 higher at RMB1,712/tonne.

 

Trading volume for corn contracts totaled 549,064 lots, compared with 690,038 lots Wednesday.

 

Ma expects corn prices to go through a long and steep downward correction in the next two weeks as farmers have started to sell more stocks ahead of the planting season in March.