March 21, 2007

 

Wednesday: China soybean futures settle higher on CBOT, may consolidate

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Wednesday, in line with a rise on the Chicago Board of Trade.

 

The benchmark September 2007 contract settled RMB17 higher at RMB3,226 a metric tonne.

 

Total trading volume rose to 142,016 lots from 79,090 lots Tuesday. One lot is equivalent to 10 tonnes.

 

CBOT soybean futures ended higher Tuesday, climbing to a one-week high on a combination of technical, commercial and speculative buying.

 

"Despite the coming soybean supply from South America in April and May, strong demand and fund buying will likely keep any fall limited," said Zeng Xuezhou, a trader at Beite Futures Co.

 

Meanwhile, processing plants may try to keep soybean prices from rising further and push soymeal and soyoil prices higher, as their profits are too low.

 

As a result, soybean prices are likely to consolidate in the near term, Zeng said.

 

Prices of soymeal and soyoil, which are made from crushing soybeans, are low compared with soybeans.

 

Soymeal futures and soyoil futures settled higher.

 

The benchmark September 2007 soymeal contract rose RMB11 to settle at RMB2,668/tonne, while the benchmark September 2007 soyoil contract settled RMB34 higher at RMB6,556/tonne.

 

Corn futures settled higher. The benchmark September 2007 contract settled RMB2 higher at RMB1,695/tonne.

 

Trading volume for all corn contracts fell to 141,712 lots from 174,856 lots Tuesday.

 

Corn futures are waiting for more news to guide trading, and a clear direction may surface in three weeks' time, when the planting season in the U.S. begins and weather becomes the focus, said traders.