April 2, 2007

Monday: China soybean futures settle down on CBOT fall; corn down sharply

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Monday, pressured by Friday's losses in Chicago Board of Trade soybean futures.

 

The benchmark September 2007 contract fell RMB12 to settle at RMB3,225 a metric tonne, after trading between RMB3,189/tonne and RMB3,249/tonne.

 

Total trading volume rose to 343,654 lots from Friday's 223,142 lots. One lot equals 10 tonnes.

 

"There was some fresh buying at the dip today, as the USDA report is fundamentally supportive to soybean," said an analyst in Beijing.

 

"This could prove to be a healthy correction for soybean, and investors expect gains in CBOT in coming sessions," he added.

 

The U.S. Department of Agriculture said Friday that U.S. farmers would plant 67.140 million acres of soybean this year, an 11% drop from 2006, as the rise in corn prices resulted in growth of corn acreage.

 

Dalian's soymeal and soyoil futures settled lower, along with losses in soybean futures.

 

The benchmark September 2007 soymeal contract gained RMB25 to settle at RMB2,639/tonne.

 

The benchmark September 2007 soyoil contract settled RMB44 lower at RMB6,690/tonne.

 

Corn futures traded on the exchange settled sharply lower, after CBOT corn went limit-down Friday, analysts said.

 

The USDA estimated 2007 corn planted acreage at 90.454 million acres, well above the average estimate of 88.061 million in Dow Jones Newswires' pre-report survey of analysts, and sharply higher than the 78.327 million planted by U.S. farmers in 2006.

 

"CBOT corn futures will likely see more losses in the following sessions as Friday's limit-down levels prevented further selling," said Zhang Yifang, a trader at China Grains & Oils Group Feed Corp.

 

Cash values are also seeing pressure on the domestic market, given higher acreage this year, which will also weigh on futures, said Zhang.

 

The benchmark September 2007 contract settled RMB33, or 2.0%, lower at RMB1,654/tonne, after trading between RMB1,630/tonne and RMB1,665/tonne.

 

Trading volume for all contracts totaled 728,600 lots, versus Friday's 206,094 lots.

 

"If corn is to see more losses this week, follow-through short-covering will prevent the front-month contract from falling too sharply, hence lending support to prices in the near term," Zhang said.