May 8, 2007

 

Tuesday: China soybean futures settle down on CBOT, more supply pressure

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly lower Tuesday, following overnight losses at the Chicago Board of Trade.

 

The benchmark September 2007 contract settled RMB4 lower at RMB3,114 a metric tonne.

 

Total trading volume declined to 65,208 lots from 75,970 lots April 30, the last trading session before the week-long Labor Day holiday. One lot is equivalent to 10 tonnes.

 

Soybean futures on the CBOT fell during most of the trading days while China's market was closed.

 

The outlook for the planting progress of both soybeans and corn is good due to drier weather across the U.S. Midwest.

 

Meanwhile, with the arrival of South America soybeans, domestic soybean prices are under pressure, said analysts.

 

But they said the expected purchase of 300 million bushels of U.S. soybeans May 14 didn't have much impact on the market, as it has already been priced in.

 

Soymeal futures ended mixed, but soyoil futures ended mostly lower.

 

The benchmark September 2007 soymeal contract fell RMB3 to settle at RMB2,532/tonne, while the benchmark September 2007 soyoil contract settled RMB24 lower at RMB6,892/tonne.

 

The recovery of the feedmeal sector, though it has started, is not as good as the market has expected, pushing soymeal prices lower.

 

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

 

However, corn futures settled higher on firmer cash prices. The benchmark September 2007 contract settled RMB9 higher at RMB1,662/tonne.

 

With the start of the planting season, farmers have only around 20% of corn stocks on hand, and are reluctant to sell, said Kang Zhichao, an analyst at Nanhua Futures Co.

 

He expects the benchmark contract to consolidate between RMB1,630-RMB1,700/tonne in the near term.

 

Trading volume for all corn contracts fell to 213,954 lots from 214,224 lots before the holiday break.