April 3, 2007

 

Tuesday: China soybean futures settle sharply up on CBOT rise; corn up

 

 

Soybean futures traded on the Dalian Commodity Exchange settled sharply up Tuesday on gains in Chicago Board of Trade soybean futures overnight.

 

"Soybean was pressured by losses in corn yesterday, but it had its overdue rise today on strong fundamentals," said an analyst in Beijing.

 

The benchmark September 2007 contract rose RMB48, or 1.5%, to settle at RMB3,273 a metric tonne, after trading between RMB3,265/tonne and RMB3,284/tonne.

 

Total trading volume rose to 360,332 lots from Monday's 343,654 lots. One lot equals 10 tonnes.

 

"Technically, it may face a correction later this week," but prices will continue to be generally strong, said Zeng Xuezhou, an analyst at Beite Futures Co.

 

Dalian's soymeal and soyoil futures also settled higher as the rise in soybean futures lent support to soy products.

 

The benchmark September 2007 soymeal contract gained RMB30 to settle at RMB2,669/tonne.

 

The benchmark September 2007 soyoil contract settled RMB132, or 2.0%, higher at RMB6,822/tonne.

 

"Soyoil is more likely to benefit from gains in soybean than soymeal as demand for the latter is quite sluggish at the moment," said Zeng.

 

Corn futures settled higher on short-covering, following Monday's sharp decline.

 

The benchmark September 2007 contract settled RMB13 higher at RMB1,667/tonne, after trading between RMB1,665/tonne and RMB1,671/tonne.

 

Trading volume for all contracts fell sharply to 243,288 lots from Monday's 728,600 lots.

 

"Given the fundamentals, we might see more losses in corn in the coming sessions, and it may enter into a consolidation period before any supportive factors trigger fresh long buying," said the analyst in Beijing.

 

"The bearish USDA report may be only part of the story. Looking ahead, the weather conditions (in the U.S. and China) may have a bigger say in future prices," said Zeng.

 

The U.S. Department of Agriculture on Friday pegged 2007 corn seedings at 90.454 million acres, sharply higher than the 78.327 million acres in 2006.