March 27, 2006

 

Monday: China soybean futures settle up on feed demand; corn up

 

 

Soybean futures on China's Dalian Commodity Exchange settled higher Monday on speculative buying triggered by improving local feed consumption, traders and analysts said.

 

China hasn't reported any fresh outbreaks of bird flu in poultry in the past month, and the latest statistics indicate that prices of poultry and eggs have begun to rise slightly since mid-March.

 

Meanwhile, Guangdong, a major feed consumption province in the south, began resuming live poultry supply to Hong Kong Sunday.

 

Analysts said the market has become more optimistic.

 

"The news stimulated the market, which hasn't seen any direction for such a long time," said Ding Haijiang, an analyst with Nanhua Futures Co.

 

The benchmark September 2006 soybean contract settled up RMB14 at RMB2,696 a metric tonne, after trading between RMB2,673 and RMB2,706/tonne.

 

Trading volume for all soybean contracts nearly doubled to 96,644 lots from 52,560 lots Friday. Total open interest rose 12,802 lots to 292,528 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 settled RMB8 higher at RMB2,591/tonne.

 

Soymeal futures settled higher along with soybeans, thanks to the rising demand from feed consumption. The benchmark September 2006 contract rose RMB18 to settle at RMB2,304/tonne.

 

Trading volume for all contracts rose to 407,106 lots from 194,600 lots Friday.

 

Total open interest rose 41,440 lots to 417,972 lots.

 

"If technical resistance for September soymeal at RMB2,340/tonne is breached this week, it's rather indicative of a short-term uptrend," Ding said.

 

Soyoil futures settled mostly lower. The benchmark September 2006 contract settled RMB6 lower at RMB5,165/tonne.

 

Corn futures settled slightly higher on the spillover effect from soybeans and soymeal, analysts said.

 

The most widely held September 2006 contract settled RMB4 higher at RMB1,407/tonne.