March 26, 2007

 

Monday: China soybean futures settle mostly down; market awaits USDA report

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly lower Monday as the market waited for the March 30 planting report from the U.S. Department of Agriculture.

 

The benchmark September 2007 contract settled RMB12 lower at RMB3,213 a metric tonne.

 

Total trading volume declined to 74,316 lots from 101,762 lots Friday. One lot is equivalent to 10 tonnes.

 

"Buying and selling were not active, as market participants were watching cautiously for the trading trend," said Liu Xinghua, a trader at Great Wall Futures Co.

 

The market widely expects U.S. farmers to grow more corn at the expense of soybeans due to high corn prices. Such expectations have boosted soybean prices, and the focus now is on how much the reduced soybean planting area will be.

 

Liu said the reduced soybean planting area in the official report is likely to be less than the market is expecting, thus putting pressure on soybean prices.

 

But traders also said both the domestic and international markets are unlikely to fluctuate after the report is released, as the market is supported by the reduced soybean planting area.

 

Soybean futures on the Chicago Board of Trade also fell Friday on a technical adjustment, maintaining its nearly one-month consolidation.

 

Soymeal futures settled lower, while soyoil futures settled higher.

 

The benchmark September 2007 soymeal contract fell RMB21 to settle at RMB2,642/tonne, while the benchmark September 2007 soyoil contract settled RMB56 higher at RMB6,602/tonne.

 

Corn futures settled lower. The benchmark September 2007 contract settled RMB8 lower at RMB1,682/tonne.

 

Trading volume for all corn contracts rose to 263,528 lots from 108,594 lots Friday.