April 3, 2006

 

Monday: China soybean futures settle lower on CBOT; corn mixed

 

 

Soybean futures on China's Dalian Commodity Exchange settled lower Monday, in line with Friday's losses in soybean futures on the Chicago Board of Trade.

 

Such a market response was expected, after Friday's USDA report showed record U.S. soy stocks and a bigger-than-expected estimate for 2006 U.S. soy plantings, said analysts.

 

The benchmark September 2006 soybean contract fell RMB44 to settle at RMB2,657 a metric tonne, after trading between RMB2,650 and RMB2,667/tonne.

 

Trading volume for all soybean contracts rose to 79,554 lots from 53,410 Friday. Total open interest fell 1,228 to 276,500 lots. One lot equals 10 tonnes.

 

No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled mostly lower.

 

The benchmark September contract settled RMB35 lower at RMB2,565/tonne.

 

Open interest for all No. 2 soybeans rose 3,106 to 40,038 lots.

 

"The good news is that there doesn't seem to be more bad news coming," said Yu Junli, an analyst with Green Futures Co.

 

That's why light bargain hunting was seen during the session, he said.

 

Soymeal futures settled lower along with soybeans.

 

The benchmark September 2006 contract fell RMB48 to settle at RMB2,263/tonne, after trading between RMB2,255 and RMB2,270/tonne.

 

Soyoil futures settled lower. The benchmark September 2006 contract settled RMB62 lower at RMB5,103/tonne.

 

Most corn futures settled slightly higher.

 

Although most contracts opened higher in the morning session on the back of gains in CBOT corn Friday, short selling largely trimmed the gains, said analysts.

 

The most widely held September 2006 contract settled RMB1 higher at RMB1,407/tonne, after trading between RMB1,401 and RMB1,419/tonne.

 

Trading volume for all corn contracts rose to 415,794 lots from 371,934 lots Friday.

 

Corn is still mainly used for feed production, and "if soymeal consumption doesn't pick up substantially with the easing of the bird flu situation, corn may still lack the motivation to rally," said Yu.