April 23, 2007

 

Monday: China soybean futures settle up; fundamentals favorable

 

 

Soybean futures traded on the Dalian Commodity Exchange settled higher Monday on favorable fundamentals, but uncertain weather conditions during the planting season remain a factor.

 

The benchmark September 2007 contract settled CNY14 higher at CNY3,081 a metric ton.

 

The total trading volume declined to 88,760 lots from 137,180 lots Friday. One lot is equivalent to 10 tons.

 

"The (favorable) fundamentals haven't been changed. The recent downward correction was just due to the lack of incentive news," said Xu Wenjie, a trader at Tianma Futures Co., adding the market may have seen the bottom.

 

Farmers are expected to grow more corn at the expense of soybeans this year, due to high corn prices.

 

Larry Li, an analyst at Derain Inc., said the price trend will be more clear in May when a large amount of South American soybeans arrive, and from weather changes during the planting season in April and May.

 

Soymeal and soyoil prices also ended mostly higher.

 

The benchmark September 2007 soymeal contract rose CNY14 to settle at CNY2,478/ton, while the benchmark September 2007 soyoil contract settled CNY44 higher at CNY6,932/ton.

 

The benchmark September soyoil contract will likely consolidate between CNY6,800-CNY7,000/ton within a month, but may rise more on higher crude oil prices, said Kang Bing, manager of the research department at Jingyi Futures Co.

 

Corn futures settled higher. The benchmark September 2007 contract settled CNY3 higher at CNY1,643/ton.

 

Trading volume for all corn contracts fell to 267,242 lots from 356,772 lots Friday.