March 20, 2006

 

Monday: China soybean futures rise; bird flu unlikely to spread

 

 

Soybean futures on China's Dalian Commodity Exchange settled mostly higher Monday, as a government official said there is little possibility of a large-scale bird flu outbreak in China this spring, traders and analysts said.

 

"Bird-flu outbreaks in the country have all been stamped out, and large-scale outbreak in spring isn't very likely," the official Xinhua News Agency reported Saturday, quoting Jia Youling, chief veterinarian at the Ministry of Agriculture.

 

"This is one of the few good news on the market; something we've been looking forward to," said Shi Junfeng, an analyst with Tianma Futures Co.

 

The benchmark September 2006 soybean contract rose RMB19 to settle at RMB2,674 a metric tonne, after trading between RMB2,653/tonne and RMB2,689/tonne.

 

Trading volume for all soybean contracts rose to 85,498 lots from 69,512 lots Friday.

 

Total open interest rose 2,094 lots to 267,496 lots.

 

One lot equals to 10 tonnes.

 

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

 

The benchmark September contract rose RMB1 to settle at RMB2,563/tonne, after trading between RMB2,554/tonne and RMB2,600/tonne.

 

"As fundamentals aren't likely to be reversed soon, the rebound from Friday's three-month lows, backed by the good news, isn't very strong," said Shi.

 

Soymeal futures settled higher, along with soybeans, on short covering and bargain hunting.

 

The benchmark September 2006 soymeal settled RMB20 higher at RMB2,276/tonne, after trading between RMB2,254/tonne and RMB2,290/tonne.

 

Trading volume for all soymeal contracts rose to 340,212 lots from 210,052 lots Friday.

 

Soyoil futures settled mixed, with the benchmark September 2006 contract down RMB4 at RMB5,178/tonne.

 

"Local futures are still expected to track CBOT, which hasn't breached range-bound trading," said Shi.

 

Corn futures settled slightly higher, along with soy futures. The most widely held September 2006 contract settled RMB1 higher at RMB1,390/tonne.

 

Total open interest fell 18,262 lots to 544,336 lots.