March 4, 2005

 

Friday: China soybean futures end mostly down; soymeal trade active

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly lower Friday on long liquidation and short selling, as more speculators cashed in their profits or bet on a possible downward correction after recent gains, analysts said.

 

The benchmark September soybean contract settled RMB4/ton lower at RMB2,888 a metric ton, after trading between RMB2,855/ton and RMB2,917/ton.

 

Analysts said unfavorable crop weather in South America has been overplayed and the benchmark contract in the local market obviously can't sustain its upward momentum in view of its failed attempts in each of the past three days to stay above RMB2,900/ton.

 

Meantime, long liquidation and short covering continued to emerge in the May 2005 soybean contract. The May contract shed RMB13/ton to settle at RMB2,852/ton, after trading between RMB2,819/ton and RMB2,882/ton.

 

Open interest on the May contract fell 24,408 lots to 107,988 lots, after a drop of 24,908 lots Thursday. One lot equals 10 tons.

 

Trading volume for soybean futures on Dalian totaled 492,458 lots, down from Thursday's 532,466 lots.

 

Most of the six No. 2 soybean contracts, which can be delivered with soybeans harvested from genetically modified crops, settled lower.

 

The benchmark May 2005 No. 2 contract gave up RMB3/ton to settle at RMB2,794/ton, after trading between RMB2,771/ton and RMB2,818/ton.

 

Trading volume for No. 2 soybeans rose to 12,842 lots from 9,760 lots Thursday.

 

"Soybean futures will likely consolidate around their recent high levels or trend lower next week (if there is no bullish news)," said Pan Fei, an analyst at Bohai Futures.

 

Soymeal futures traded in Dalian settled lower in extremely active trading, stealing some spotlight from the soybeans.

 

The benchmark May 2005 soymeal contract fell RMB4/ton to settle at RMB2,566/ton, after trading in a wide range of RMB2,511/ton and RMB2,612/ton.

 

Trading volume in the benchmark contract skyrocketed to a record high of 734,712 lots from 512,330 lots Thursday, which were already on the high side.

 

The benchmark soymeal contract has risen almost RMB400/ton over past eight trading sessions, along with a jump in cash soymeal prices.

 

"Buying was almost unstoppable in the past few days, but it encountered strong selling today," said a Beijing-based analyst.

 

Bohai's Pan said that, like benchmark soybeans, the benchmark soymeal also lacks upward momentum, falling back after poking above RMB2,600/ton.

 

Corn futures traded on the exchange settled mixed in two-way trading on a lack of news.

 

The benchmark May 2005 contract settled RMB2/ton higher at RMB1,176/ton, after trading between RMB1,170/ton and RMB1,182/ton.