March 30, 2006

 

Thursday: China soybean futures settle mostly lower; corn mixed

 

 

Most soybean futures on China's Dalian Commodity Exchange settled slightly lower Thursday in quiet trading, while long liquidation slightly outpaced short-covering ahead of key U.S. data Friday.

 

"Cautious investors chose to retreat, as its influence on CBOT is unclear," said Liu Xinghua, an analyst with Great Wall Futures Co.

 

Some speculators holding long positions, having benefited from a rebound since last week, say it is time to leave, as fundamentals remain largely bearish, Liu said.

 

The benchmark September 2006 soybean contract fell RMB7 to settle at RMB2,686 a metric tonne, after trading between RMB2,681/tonne and RMB2,694/tonne.

 

Trading volume for all soybean contracts shrank to 32,698 lots from 44,126 lots Wednesday.

 

Total open interest fell by 6,222 lots to 280,266 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 unchanged at RMB2,592/tonne.

 

Most soymeal futures settled slightly lower on long liquidation, along with soybeans.

 

The benchmark September 2006 contract settled RMB4 lower to RMB2,294/tonne.

 

Open interest for all soymeal contracts fell by 13,348 lots to 405,014 lots.

 

"Although there are signs that feed consumption is picking up in some places, it's still not substantial enough to signal that the demand (for soymeal) is to rise significantly," said Gao Yanrong, a soy analyst with Dalu Futures Co.

 

Soyoil futures settled mixed. The benchmark September 2006 contract settled RMB9 lower at RMB5,148/tonne.

 

Corn futures settled mixed, after range-bound trading.

 

The most widely held September 2006 contract settled RMB1 higher at RMB1,399/tonne.

 

"If corn wants to enter another uptrend, it will need support from soy futures," said Gao.