May 10, 2006

 

Wednesday: China soybean futures settle higher on CBOT rise; corn up

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled higher Wednesday, tracking overnight gains in Chicago Board of Trade soybean futures.

 

The benchmark September 2006 soybean contract settled RMB10 higher at RMB2,670 a metric tonne, after trading between RMB2,663/tonne and RMB2,679/tonne.

 

Trading volume for all soybean contracts fell to 51,370 lots from 78,456 lots Tuesday.

 

One lot equals to 10 tonnes.

 

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

 

The benchmark September contract rose RMB18 to settle at RMB2,542/tonne.

 

"Fundamentals haven't changed. It's just that other commodities prices are lending support to CBOT soy futures, resulting in higher local soybean futures," said Liu Xinghua, an analyst with Greatwall Futures Co.

 

Soymeal futures settled higher on fresh buying by speculators, said analysts.

 

"It's true that soymeal prices in some places, such as Shandong province, are rising, but it's largely a result of rising futures prices, not a substantial change in terms of supply and demand," Liu said. "We still have plenty of supply."

 

The most widely held September 2006 contract rose RMB12 to settle at RMB2,298/tonne, after trading between RMB2,288/tonne and RMB2,309/tonne.

 

Soyoil futures settled higher, along with other soy futures. The benchmark September 2006 contract rose RMB48 to settle at RMB5,190/tonne.

 

"A technical correction (for soy futures) is likely in the following sessions, but the trend is still up," said Liu.

 

Corn futures settled mostly higher, underpinned by rising prices on the spot market.

 

Farmers' stocks have fallen to low levels in some places, so there are supply concerns in the short run, said analysts.

 

"The rising price of corn on the spot market has been taken as a signal for a continuous improvement in feed consumption by investors," said Liu.

 

The benchmark January 2007 contract settled RMB11 higher at RMB1,473/tonne, after trading between RMB1,465/tonne and RMB1,485/tonne.

 

Trading volume for all corn contracts fell slightly to 701,700 lots from 706,474 lots Tuesday.