March 17, 2006

 

Friday: China soybean futures settle lower on CBOT; corn down 

 

 

Soybean futures on China's Dalian Commodity Exchange settled lower Friday on overnight losses in Chicago Board of Trade soybean futures, traders said.

 

Short selling, though still tentative, outpaced bargain-hunting, as some local speculators thought they had received a confirmative signal of a downtrend from CBOT after the benchmark May contract settled below $5.80 a bushel Thursday.

 

The benchmark September 2006 soybean contract settled RMB17 lower at RMB2,655 a metric tonne, after falling to a three-month low of RMB2,648/tonne in the morning session.

 

Trading volume for all soybean contracts fell to 69,512 lots from 76,202 lots Thursday.

 

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

 

The benchmark September contract fell RMB23 to settle at RMB2,562/tonne, after trading between RMB2,553 and RMB2,570/tonne.

 

Trading volume for all No. 2 contracts fell to 68,958 lots from 73,818 lots Thursday, while total open interest rose 30 lots to 40,078 lots.

 

Though many local investors still waited on the sidelines, unsure of the market's direction, "technically and fundamentally, a downward trend in the short run is more likely than an uptrend," said Zeng Xuezhou, an analyst with Beite Futures Co.

 

Local investors have been waiting for CBOT to break out of its range-bound trade, in spite of bearish fundamentals in the form of an oversupplied market combined with shrinking demand due to concerns over bird-flu.

 

Soymeal and soyoil futures settled lower along with soybeans.

 

The benchmark September 2006 soymeal contract closed at its three-month low of RMB2,249/tonne, and settled at RMB2,256/tonne, down RMB28.

 

Trading volume for all soymeal contracts fell to 210,052 lots from 303,822 Thursday.

 

The benchmark September 2006 soyoil contract settled RMB27 lower at RMB5,182/tonne.

 

Corn futures settled lower, pressured by the market's concern that bird flu will continue to weigh on local feed demand, which is still corn's major usage, analysts said.

 

The benchmark September 2006 contract settled RMB17 lower at RMB1,389/tonne.

 

Total open interest fell 57,624 lots to 562,598 lots.

 

Zeng said technical support for the benchmark will be around RMB1,360-RMB1,370/tonne.