May 14, 2007

 

Monday: China soybean futures settle higher on favorable USDA report

 

 

Soybean futures traded on the Dalian Commodity Exchange settled sharply higher Monday, boosted by the 2007/08 stocks estimate from the U.S. Department of Agriculture.

 

The benchmark September 2007 contract settled RMB68 higher at RMB3,211 a metric tonne.

 

Total trading volume rose to 217,298 lots from 119,622 lots Friday. One lot is equivalent to 10 tonnes.

 

The USDA data was supportive for soybeans as the agency's first look at the new-crop balance sheet cut stocks in half from the record 2006-07 carryout projections, analysts said.

 

New-crop ending stocks were pegged at 320 million bushels, below the average analyst estimate of 337 million and the USDA's latest old-crop estimate of 610 million.

 

Soymeal and soyoil futures also settled higher.

 

The benchmark September 2007 soymeal contract rose RMB51 to settle at RMB2,587/tonne, while the benchmark September 2007 soyoil contract settled RMB174 higher at RMB7,248/tonne.

 

Corn futures also settled higher on the report. The benchmark September 2007 contract settled RMB18 higher at RMB1,684/tonne.

 

The USDA estimated 2007-08 corn stocks at 947 million bushels, below the average analyst estimate of 1.058 billion bushels and nearly unchanged with the 937 million bushels forecast for the 2006-07 marketing year.

 

But Zhang Yifan, a trader with China Grains & Oils Group Feed Corp., said the benchmark corn contract is still under the important technical and psychological resistance range of RMB1,685-RMB1,700/tonne, and is unlikely to break through.

 

The growing demand for wheat, a cheaper substitute for corn as animal feed, may pressure the corn prices, said analysts.

 

Trading volume for all corn contracts rose to 475,040 lots from 287,026 lots Friday.