May 15, 2006

 

Monday: China soybean futures settle down tracking CBOT; corn mixed

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled slightly lower Monday, following weak sentiment on the Chicago Board of Trade.

 

"Although USDA's high stocks report was more or less expected, the U.S. market still responded to it last Friday, so the local market continued the trend today," said a Zhejiang-based trader.

 

The benchmark September 2006 soybean contract settled RMB8 lower at RMB2,687 a metric tonne, after trading between RMB2,678/tonne and RMB2,699/tonne.

 

Overall trading volume fell to 36,918 lots from 76,470 lots Friday.

 

One lot is equal to 10 tonnes.

 

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

 

The benchmark September contract rose RMB1 to settle at RMB2,576/tonne.

 

Investors were reluctant to build new positions in the session, merely waiting for CBOT to provide them with more cues, said analysts.

 

"The bullish metals and oil markets, combined with an uptrend indicated by technical charts, have convinced some local investors that the market will be bullish," said Tang Yi, a market analyst with Louis Dreyfus Beijing Corp.

 

However, there is still oversupply, and looming hedge-related pressures as prices continue to rise, Tang said.

 

Soymeal and soyoil futures settled mixed.

 

The benchmark November 2006 soymeal contract rose RMB1 to settle at RMB2,420/tonne, after trading between RMB2,402/tonne and RMB2,439/tonne.

 

The benchmark September 2006 soyoil contract fell RMB32 to settle at RMB5,246/tonne.

 

Corn futures settled mixed.

 

The benchmark January 2007 contract rose CN11 to settle at RMB1,488/tonne, following strong gains in CBOT corn futures Friday on lower-than-expected 2006-07 ending stocks, said analysts.

 

"Local investors are paying more attention to CBOT corn futures, as the market expects the country to become a net importer of corn sooner or later," said Tang.

 

Trading volume for all corn contracts rose slightly to 851,038 lots from 718,286 lots Friday.

 

Analysts said China's yuan breaching the psychologically important resistance level of 8 to the U.S. dollar Monday didn't have much impact on the futures market, even though a faster appreciation of the yuan is expected by some market participants.

 

"The breach was expected, but the yuan's appreciation isn't yet a factor that the market paying much attention," said the Zhejiang-based trader.