April 25, 2006

 

Tuesday: China soybean futures settle down on thin demand, high stks

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled lower Tuesday, as physical demand for soybeans remained muted amid high stocks in China.

 

"At present, soybean futures in China are pretty much near the bottom. Since soybean stocks remain quite high, upside potential for soybean futures remains limited," said a trader at one of China's largest grains buying companies.

 

Domestic demand for soybeans also remains quite muted, he added.

 

China's soybean supplies have swelled over the past two months as importers have increased purchases of freshly harvested soybean crops in Brazil and Argentina.

 

Trading volume in Dalian's No.1 soybean futures totaled 48,398 lots, down from 54,164 lots on Monday.

 

One lot is equivalent to 10 tonnes.

 

The benchmark September 2006 contract for No. 1 soybeans shed RMB8 to settle at RMB2,593 a metric tonne, after trading between RMB2,587 and RMB2,601/tonne.

 

Traders said soybean futures may gradually show some uptrend next month, as futures look close to bottoming out and Chinese importers have slowedsoybean buying.

 

No. 2 soybean contracts, which can be delivered with soybeans harvested from genetically modified crops, settled lower amid a generally negative mood.

 

The benchmark September 2006 contract fell RMB5 to settle at RMB2,493/tonne.

 

Soyoil and soymeal futures also settled lower, tracking the negative sentiment in soybean futures.

 

The benchmark September 2006 soyoil contract settled RMB17 lower at RMB5,108/tonne, after trading between RMB5,090 and RMB5,130.

 

The benchmark September 2006 soymeal contract settled RMB11 lower at RMB2,199, after trading between RMB2,194 and RMB2,206/tonne.

 

China's corn futures settled lower as well, with the benchmark January 2007 contract settling RMB12 lower at RMB1,393/tonne.