March 20, 2007

 

Tuesday: China soybean futures settle mostly lower on sluggish demand

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly lower Tuesday amid sluggish domestic consumption and a lack of market-moving news.

 

The benchmark September 2007 contract settled unchanged at RMB3,209 a metric tonne.

 

Total trading volume declined to 79,090 lots from 111,036 lots Monday. One lot is equivalent to 10 tonnes.

 

"The market dares not buy or sell heavily ahead of the March 30 planting report from the U.S. Department of Agriculture," said Gao Yanrong, a trader at Dalu Futures Co.

 

He said soybean futures could fell further due to sluggish demand from the livestock sector.

 

Soymeal, which is made by crushing soybeans, is used as animal feed.

 

Traders said the consolidation period may last until April or May, unless the U.S. planting report doesn't matchmarket expectations.

 

The market has long been expecting farmers to grow more corn at the expense of soybeans due to high corn prices. The issue is how much more corn farmers will grow.

 

Soymeal futures settled mostly lower, while soyoil futures settled mostly higher.

 

The benchmark September 2007 soymeal contract fell RMB2 to settle at RMB2,657/tonne, while the benchmark September 2007 soyoil contract settled RMB14 higher at RMB6,522/tonne.

 

Corn futures settled lower. The benchmark September 2007 contract settled RMB3 lower at RMB1,693/tonne.

 

Trading volume for all corn contracts fell to 174,856 lots from 189,538 lots Monday.