March 9, 2007

 

Friday: China soybean futures settle down; liquidation ahead Of USDA report

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Friday on long liquidation ahead of the U.S. Department of Agriculture's March supply and demand report due later Friday.

 

Despite overnight gains in the Chicago Board of Trade soybean futures, an abundant domestic supply and the retreat of CBOT soybean futures from the highs triggered concerns of a possible downward correction, analysts said.

 

The benchmark September 2007 contract settled RMB16 lower at RMB3,208 a metric tonne, after trading between RMB3,197/tonne and RMB3,224/tonne.

 

Total trading volume fell to 129,286 lots from 139,388 lots Thursday. One lot is equivalent to 10 tonnes.

 

"Domestic prices of soy products are seen in a downward trend right now amid a high import volume, which will pressure soybean prices," said Liu Xinghua, an analyst at Great Wall Futures Co.

 

Dalian's soymeal and soyoil futures settled lower, in line with losses in soybean and weak cash prices.

 

The benchmark September 2007 soymeal contract fell RMB13 to settle at RMB2,685/tonne. The benchmark September 2007 soyoil contract settled RMB6 lower at RMB6,486/tonne.

 

"There's no strong buying on the spot market to support prices of soymeal and soyoil, and hence soy futures are likely to continue to be weak next week, given the large amount of imports," said Gao Yanrong, an analyst with Dalu Futures Co.

 

Analysts said although soybean prices on the spot market rose this week, they may soon fall, tracking the decline in soymeal and soyoil prices.

 

Dalian's corn futures settled lower on fresh short positions. The benchmark September 2007 contract fell RMB8 to settle at RMB1,689/tonne.

 

Trading volume for all contracts rose to 659,662 lots from 423,868 lots Thursday.

 

"Corn will probably see more losses next week, as charts indicate, before it finds fresh positive news to support a rally," Liu said.