April 10, 2007

 

Tuesday: China soybean futures settle down; traders put off by slow market

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday as traders were disappointed over the market's lack of reaction to a bullish USDA report.

 

The benchmark September 2007 contract settled RMB38 lower at RMB3,211 a metric tonne.

 

Total trading volume rose to 221,748 lots from 207,250 lots Monday. One lot is equivalent to 10 tonnes.

 

"Many traders had expected soybean (futures) prices to post strong gains after the positive U.S. Department of Agriculture planting report," but they were let down, said Ding Haijiang, a trader at Nanhua Futures Co.

 

The USDA said in its March 30 report that U.S. farmers would plant 67.140 million acres of soybeans this year, an 11% drop from 2006, as the rise in corn prices resulted in growth of corn acreage.

 

But soybean futures have been choppy since the release of the report.

 

Ding expects soybean prices to stay sluggish for the coming sessions.

 

Meanwhile, the arrival of South America soybeans in April will put more pressure on domestic stocks, likely pushing prices lower, said Zhang Yifan, a trader at China Grains & Oils Group Feed Corp.

 

China's soybean imports in March totaled 2.11 million metric tonnes, up 79% from 1.18 million tonnes in February, preliminary data provided by the General Administration of Customs showed Tuesday.

 

The country's corn exports in March totaled 1.13 million tonnes, according to the preliminary data.

 

Soymeal futures and soyoil futures also settled lower.

 

The benchmark September 2007 soymeal contract fell RMB36 to settle at RMB2,618/tonne, while the benchmark September 2007 soyoil contract settled RMB58 lower at RMB6,780/tonne.

 

Corn futures settled mixed. The benchmark September 2007 contract settled RMB1 higher at RMB1,689/tonne.

 

Trading volume for all corn contracts fell to 448,956 lots from 840,948 lots Monday.

 

Zhang said the sharp fall in crude oil futures Monday also put pressure on soyoil and corn prices.

 

Soyoil and corn can be used to make alternative fuels.