May 16, 2007

 

Wednesday: China soybean futures settle up; mid-term rise established

 

 

Soybean futures settled higher on the Dalian Commodity Exchange on Wednesday, following overnight gains at the Chicago Board of Trade.

 

The benchmark September 2007 contract moved RMB29 higher to RMB3,238 a metric tonne.

 

"The rising trend (in the domestic market) in the mid-term is established," said Zhao Qiang, research manager at Tianqi Futures in Heilongjiang province.

 

Total trading volume declined to 172,776 lots from 203,314 lots Tuesday. One lot is equivalent to 10 tonnes.

 

CBOT soybean futures ended higher across the board Tuesday, extending their upward trend on the back of speculative fund buying.

 

Zhao expects the benchmark July soybeans on CBOT, which closed higher at US$7.78/bushel Tuesday, to meet resistance at US$8.00/bushel.

 

Soymeal and soyoil contracts were mostly higher.

 

The benchmark September 2007 soymeal contract rose RMB31 to settle at RMB2,607/tonne, while the benchmark September 2007 soyoil contract rose by RMB68 to RMB7,290/tonne.

 

Traders said summer is the traditional slack season for soyoil consumption, so soyoil prices may face downward pressure later.

 

Corn futures also went higher on rising cash prices. The benchmark September 2007 contract settled RMB6 higher at RMB1,685/tonne.

 

Farmers weren't eager to sell corn as the planting season nears end and the dry weather makes it easy to preserve the crop.

 

Trading volume for all corn contracts rose to 336,074 lots from 303,374 lots Tuesday.