May 8, 2006

 

Monday: China soybean futures settle up post-holiday on CBOT

 

 

Soybean futures on China's Dalian Commodity Exchange settled mostly higher in the first trading day after the week-long holiday, tracking gains in Chicago Board of Trade soybean futures last week when the local market was closed, traders said.

 

The benchmark September 2006 soybean contract settled up RMB21 from Friday April 28, the last trading day before the holiday, at RMB2,643 a metric tonne, after trading between RMB2,631/tonne and RMB2,657/tonne.

 

Trading volume for all soybean contracts shrank to 43,938 lots vs 57,762 lots.

 

One lot equals 10 tonnes.

 

No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled mostly up.

 

The benchmark September contract rose RMB20 to settle at RMB2,525/tonne.

 

Soybean futures opened higher in the morning session, but long liquidation soon trimmed part of the gains, as some investors were still skeptical about such gains, given the fundamentals, said Zeng Xuezhou, an analyst with Beite Futures Co.

 

The Chinese government reported an outbreak of bird flu in western China Friday after 125 wild birds were found dead, a sign of the difficulties in controlling the spread of the virus.

 

"It's true that fundamentals didn't change much, but the general climate of commodities has changed, thanks to the surging gold and oil prices," said Zeng.

 

"Soybean prices won't be completely decided by its own supply and demand situation," he said.

 

Zeng said most investors believe that soybean is less likely to stick to its fundamentals, regardless of the gains on other commodities markets.

 

Dalian's soymeal futures settled higher, along with soybean futures.

 

The most widely held September 2006 contract rose RMB30 to settle at RMB2,268/tonne, after trading between RMB2,259/tonne and RMB2,285/tonne.

 

Soyoil futures settled mixed. The benchmark September 2006 contract fell RMB12 to settle at RMB5,148/tonne.

 

Corn futures settled higher, supported by rising prices on the local spot market and demand from processors, analysts said.

 

The benchmark January 2007 contract settled RMB10 higher at RMB1,444/tonne, after trading between RMB1,438/tonne and RMB1,453/tonne.

 

Trading volume for all corn contracts rose to 537,788 lots from 520,808 in the last trading session.

 

"Corn is the forerunner for soybeans," said Li Honglei, an analyst with Nanhua Futures Co, "Investors' confidence was boosted by the change on the spot market."