March 14, 2007

 

Wednesday: China soybean futures settle lower on CBOT decline ;corn mixed

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday, following overnight losses in Chicago Board of Trade soybean futures.

 

The benchmark September 2007 contract fell RMB21 to settle at RMB3,196 a metric tonne, after trading between RMB3,188/tonne and RMB3,206/tonne.

 

Total trading volume rose to 151,482 lots from 106,994 lots Tuesday. One lot is equivalent to 10 tonnes.

 

Analysts said volatility in other markets recently spilled over to agricultural commodities, which prompted local speculators to retreat from the markets.

 

"Other markets, like crude oil, shares, have recently been affecting market sentiment, and if funds decide to liquidate on CBOT, soybean futures in Dalian will see more losses," said a dealer at a major brokerage in Shanghai.

 

"Besides, technically, soybean futures also look to test lower levels," the dealer said.

 

Dalian's soymeal and soyoil futures settled mostly lower, along with soybean futures.

 

The benchmark September 2007 soymeal contract fell RMB27 to settle at RMB2,663/tonne. The benchmark September 2007 soyoil contract settled RMB14 lower at RMB6,508/tonne.

 

Dalian's corn futures settled mixed. The benchmark September 2007 contract settled unchanged at RMB1,690/tonne, after trading between RMB1,686/tonne and RMB1,695/tonne.

 

Trading volume for all contracts fell to 385,316 lots from 545,086 lots Tuesday.

 

"Technically, there's room for further downward correction (for corn), and cash values are also weighing on futures prices," said Zhang Yifan, an analyst at China Grains & Oils Group Feed Corp.

 

Average prices in Shandong province were at RMB1,530-RMB1,590/tonne, up from RMB1,510-RMB1,570/tonne a week earlier.

 

The murky outlook and potential risks from other markets also led both longs and shorts to retreat, especially in view of a steady decline in open interest, analysts said.