May 23, 2007

Wednesday: China soybean futures settle down; lack of momentum to rise

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

The benchmark September 2007 soybean contract settled RMB11 lower at RMB3,240 a metric tonne.

Total trading volume declined to 192,456 lots from 247,014 lots Tuesday. One lot is equivalent to 10 tonnes.

Prices are high, and there's a lack of momentum to rise further, as there is no news to push prices higher, said Li Jun, a trader at Tonglian Futures.

He expects the September contract to consolidate between RMB3,200-RMB3,250/tonne in the near term.

Traders said the large amount of domestic demand will help support cash prices, despite the negative impact from dry weather in northeast major producing regions.

Soymeal contracts settled mostly higher, while soyoil futures settled mixed.

The benchmark September 2007 soymeal contract settled RMB1 higher at RMB2,614/tonne, while the benchmark September 2007 soyoil contract settled RMB28 lower at RMB7,322/tonne.

As pork prices keep rising, farmers will likely raise more pigs later on, with the recovery of the feedmeal sector expected to improve from late June, said analysts. Soymeal is used as animal feed.