March 14, 2006

 

Tuesday: China soybean futures settle mostly lower; corn down

 

 

Soybean futures on China's Dalian Commodity Exchange settled mostly lower Tuesday on short selling, amid rising supply and a spread of H5N1 bird flu virus, analysts said.

 

The benchmark September 2006 soybean contract settled RMB16 lower at RMB2,689 a metric tonne, after dipping to a six-week low of RMB2,678/tonne in the afternoon session.

 

Trading volume for all soybean contracts nearly doubled to 81,160 lots.

 

"We can no longer find a single factor that would be supportive for prices, although short selling still seems tentative," said a trader based in Zhejiang province.

 

In the short term, the extent of decline in prices will depend on trends in other commodities futures, he added.

 

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

 

The benchmark September contract fell RMB20 to settle at RMB2,605/tonne.

 

Soymeal futures settled lower on short selling, and the exchange's amendments to soymeal contracts Monday sparked active trading, analysts said.

 

Late Monday, the Dalian Commodity Exchange announced several changes to soymeal contracts, including lowering the quality of soymeal to be delivered and raising price limits to 4% from 3%.

 

The measures are aimed at attracting more investors, as the market has been lackluster, analysts said.

 

The benchmark September 2006 contract fell RMB18 to settle at RMB2,301/tonne, after trading between RMB2,288/tonne and RMB2,316/tonne.

 

Soyoil futures settled mostly lower on spillover effects from soymeal and soybeans. The benchmark September 2006 contract settled RMB14 lower at RMB5,217/tonne.

 

Corn futures settled mostly lower yet again on long liquidation.

 

The benchmark September 2006 contract settled RMB13 lower at RMB1,415/tonne.

 

Open interest for all contracts fell by 37,852 lots to 645,932 lots.