March 9, 2006

 

Thursday: China soybean futures mostly settle higher; corn down

 

 

Most soybean futures on China's Dalian Commodity Exchange settled slightly higher Thursday as long position holders turned bargain hunters.

 

The benchmark September 2006 soybean contract settled RMB8 higher at RMB2,712 a metric tonne.

 

Zeng Xuezhou, an analyst with Beite Futures Co., said some speculators think $5.80 a bushel for the May Chicago Board of Trade soybean contract is a bottom that won't be easily breached, even if the upcoming U.S. Department of Agriculture report is negative.

 

"If their judgment is right, then it's time for bargain-hunting," Zeng said.

 

Trading volume for all soybean contracts fell to 51,530 lots from 101,208 lots Wednesday. One lot equals to 10 tonnes.

 

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

 

The benchmark September contract rose RMB21 to settle at RMB2,632/tonne.

 

Soymeal futures settled mostly higher on long buying, amid some optimism over CBOT prices Thursday. The benchmark September 2006 contract rose RMB9 to settle at RMB2,325/tonne.

 

Soyoil futures settled higher along with soybean futures. The benchmark September 2006 soyoil contract settled up RMB5 at RMB5,219/tonne.

 

"There's almost no supportive fundamentals, so I don't think holding long positions for long term is wise," Zeng said.

 

Rains ahead of the spring planting, the harvest in South America and the spreading bird flu virus can only lead to growing supply and shrinking demand, Zeng cautioned.

 

Corn futures settled slightly lower on long liquidation, but technical support at RMB1,400/tonne is strong, analysts said.

 

The benchmark September 2006 contract settled RMB7 lower to RMB1,432/tonne, after trading between RMB1,424/tonne and RMB1,441/tonne.

 

Open interest for all contracts fell by 15,480 lots to 713,652 lots.