March 10, 2006

 

Friday: China soybean futures settle mixed in dull trade; corn up

 

 

Soybean futures on China's Dalian Commodity Exchange settled mixed Friday in a lackluster market pressured by a spread of the deadly H5N1 bird flu virus.

 

The benchmark September 2006 soybean contract settled RMB2 lower at RMB2,710 a metric tonne.

 

The benchmark contract reached its intraday high soon after the market opened, but fell to near intraday low levels at market close because of short selling.

 

Two human deaths from bird flu reported during the past week pressured the local market, said Yu Junli, an analyst with Green Futures Co.

 

"For speculators looking for quick money, soybeans aren't as attractive as other local commodities, such as sugar and fuel oil," Yu said.

 

Meanwhile, small gains in soybean futures on CBOT won't be able to lead local futures higher, he said.

 

Trading volume for all soybean contracts fell to 47,704 lots from 51,530 lots Thursday. One lot equals 10 tonnes.

 

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

 

The benchmark September contract fell RMB12 to settle at RMB2,620/tonne.

 

Soymeal futures settled mostly lower on long liquidation. The benchmark September 2006 contract fell RMB3 to settle at RMB2,322/tonne.

 

Soyoil futures settled mixed. The benchmark September 2006 contract settled up RMB3 at RMB5,222/tonne.

 

"Trading has been dull for weeks, with only a small number of speculators building short-term positions," Yu said, adding that this "isn't likely to change until the end of the month, unfortunately."

 

Corn futures settled slightly higher. Most contracts posted intraday highs at the opening on CBOT corn gains, but long liquidation trimmed gains.

 

Investors were upbeat about corn amid a rapidly expanding corn processing industry, a Beijing-based analyst said. Although corn fundamentals are separate from soybean fundamentals, corn isn't immune to the spread of bird flu, she added.

 

The benchmark September 2006 contract settled RMB3 higher at RMB1,435/tonne, after trading between RMB1,428/tonne and RMB1,445/tonne.

 

Open interest for all contracts fell by 28,112 lots to 685,540 lots.