April 20, 2007

 

Friday: China soybean futures settle up on CBOT; new supply to pressure

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Friday, following overnight gains on the Chicago Board of Trade.

 

But traders said the arrival of South American soybeans will put pressure on domestic prices in the near term.

 

The benchmark September 2007 contract settled RMB7 higher at RMB3,067 a metric tonne.

 

Total trading volume fell to 137,180 lots from 283,196 lots Thursday. One lot is equivalent to 10 tonnes.

 

Soybean futures prices recently fell sharply on low cash prices, and the rebound could be brief, said traders.

 

"Soymeal prices are too low, so processing plants are reluctant to purchase more soybeans due to low profits," said Ma Mingwang, an analyst at Tianqi Futures.

 

Soymeal, which is made from crushing soybean, is used as animal feed.

 

The demand for soymeal is sluggish due to slow recovery in the feeding sector, keeping the soymeal stocks at high levels.

 

Soymeal futures and soyoil futures settled mostly higher.

 

The benchmark September 2007 soymeal contract rose RMB15 to settle at RMB2,464/tonne, while the benchmark September 2007 soyoil contract settled RMB56 higher at RMB6,888/tonne.

 

Corn futures settled lower. The benchmark September 2007 contract settled RMB3 lower at RMB1,640/tonne.

 

Trading volume for all corn contracts fell to 356,772 lots from 433,384 lots Thursday.