March 5, 2007

 

Monday: China soybean futures settle down on CBOT; corn up on heavy snow

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled lower Monday, following the downward correction on the Chicago Board of Trade.

 

The most active September 2007 contract settled RMB13 lower at RMB3,186 a metric tonne.

 

Total trading volume declined to 131,914 lots from 178,730 lots Friday. One lot equals 10 tonnes.

 

Long liquidation continued to pressure CBOT soybean futures Friday after pushing the market to steep losses Thursday.

 

CBOT soybean futures may fall further in the near term as the weather in South America is generally favorable for the ongoing harvest, traders said.

 

However, China's benchmark September contract is supported at RMB3,150/tonne, barring a drop in corn futures, said Zeng Xuezhou, a trader at Beite Futures Co.

 

The soybean market closely tracks corn futures, and a steep fall in corn may cause a further slip in soybean, traders said.

 

Soymeal and soyoil contracts settled mostly lower.

 

The most active September soymeal contract settled RMB8 lower at RMB2,678/tonne, while the benchmark May 2007 soyoil contract settled RMB40 lower at RMB6,428/tonne.

 

Corn futures settled higher, getting support from the recent heavy snow in major corn-producing regions in northeast China, which made transporting corn difficult.

 

The benchmark September corn contract settled RMB1 higher at RMB1,702/tonne.

 

Trading volume for corn contracts totaled 309,372 lots, compared with 338,740 lots Friday.

 

September corn contracts should see strong support at RMB1,680-RMB1,690/tonne by end-March on industrial demand, Zeng said.