April 26, 2007

 

Thursday: China soybean futures settle up; soymeal demand seen higher

 

 

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

 

The benchmark September 2007 contract settled RMB41 higher at RMB3,121 a metric tonne.

 

Total trading volume rose to 160,530 lots from 147,866 lots Wednesday. One lot equals 10 tonnes.

 

Signs pointing toward a recovering feedmeal sector also helped raise hopes for growing soymeal demand, traders said.

 

Soymeal, made from crushing soybeans, is used as animal feed.

 

"The market is ignoring the risk of a further correction (during the week-long Labor Day holiday in early May), and also, the fundamentals are good (for soybeans)," said Gao Yanrong, a trader at Dalu Futures Co.

 

The market widely expects farmers to grow more corn this year at the expense of soybean due to high corn prices and demand.

 

Soymeal and soyoil futures also ended higher.

 

The benchmark September 2007 soymeal contract rose RMB43 to settle at RMB2,524/tonne, while the benchmark September 2007 soyoil contract settled RMB50 higher at RMB6,954/tonne.

 

While soymeal cash prices stabilized this week from earlier falls, soyoil cash prices were stable to slightly lower as traders were concerned that soyoil prices may face a downward correction from currently high levels.

 

Gao expects the benchmark soyoil contract to see resistance at RMB7,000/tonne in the near term.

 

Corn futures settled higher. The benchmark September 2007 contract settled RMB15 higher at RMB1,661/tonne.

 

Trading volume for all corn contracts rose to 410,738 lots from 218,410 lots Wednesday.