March 21, 2006

 

Tuesday: China soybean futures settle slightly down on CBOT fall

 

 

Most soybean futures on China's Dalian Commodity Exchange settled slightly lower Tuesday because of overnight losses in soybean futures on the Chicago Board of Trade, analysts said.

 

Though local soybean contracts opened lower on CBOT, news that Guangdong province will resume supplying live poultry to Hong Kong at the end of the week drove prices up later in the session, analysts said.

 

The benchmark September 2006 soybean contract fell RMB6 to settle at RMB2,668 a metric tonne, after trading between RMB2,663/tonne and RMB2,673/tonne.

 

Trading volume for all soybean contracts fell to 49,608 lots from 85,498 lots Monday.

 

Total open interest rose 282 lots to 267,778 lots.

 

One lot equals 10 tonnes.

 

The thin trade indicates that most investors still find it difficult to forecast consumption against oversupply background, said Liu Xinghua, a soy analyst with Great Wall Futures Co.

 

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

 

The benchmark September contract rose RMB5 to settle at RMB2,568/tonne.

 

Soymeal futures settled mostly lower along with soybeans, though short covering trimmed some losses.

 

Local crushers have very slim profits now, so "prices are less likely to fall further," Liu said.

 

The benchmark September 2006 soymeal settled RMB10 lower at RMB2,266/tonne, after trading between RMB2,257/tonne and RMB2,274/tonne.

 

Trading volume for all soymeal contracts fell to 238,782 lots from 340,212 Monday.

 

With no new cases of Bird flu among poultry in China reported in the past three weeks, market sentiment was boosted this week, Liu said.

 

"Guangdong is a major consumer of soybeans, and if the end of the suspension (to the poultry supply) can boost local feed consumption, it'll add confidence to the industry," he said.

 

Soyoil futures settled mixed. The benchmark September 2006 contract down RMB21 to settle at RMB5,157/tonne.

 

Most corn futures settled slightly higher. The most widely held September 2006 contract settled unchanged at RMB1,390/tonne.

 

Meanwhile, investors are still optimistic about corn's uptrend in the long run, as analysts pointed to bargain-hunting in forward-month contracts during the session.

 

"Quick expansion of the corn processing industry will support the price, and technical support around RMB1,380 is strong," Liu said.