May 31, 2006

 

Wednesday: China soybean futures settle mostly down on copper fall

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly lower Wednesday, pressured by a slump in copper futures, analysts said.

 

The benchmark September 2006 soybean contract settled RMB12 lower at RMB2,649 a metric tonne, after trading between RMB2,640/tonne and RMB2,662/tonne.

 

Trading volume for all soybean contracts shrank to 19,438 lots from 31,706 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 lower.

 

The benchmark September contract fell RMB7 to settle at RMB2,547/tonne.

 

"We had responded to Tuesday's CBOT gains in advance, and its gains were not that strong, after all," said Liu Xinghua, an analyst with Greatwall Futures Co.

 

The slump in copper futures spilled over into almost all local commodities futures, even though soybean has little connection with metals on the fundamentals front, said analysts.

 

"Soy futures are still trading without direction, so they're sensitive to changes of nearby markets," Liu said.

 

Soymeal futures settled mostly lower, along with soybean futures. The benchmark November 2006 contract fell RMB13 to settle at RMB2,329/tonne, after trading between RMB2,319/tonne and RMB2,342/tonne.

 

Total trading volume fell to 235,696 lots from 396,252 lots Tuesday.

 

Soyoil futures settled mixed. The benchmark September 2006 soyoil contract settled RMB1 lower at RMB5,246/tonne.

 

Corn futures settled lower on profit-taking, analysts said.

 

The benchmark March 2007 contract settled RMB12 lower at RMB1,534/tonne, after trading between RMB1,526/tonne and RMB1,545/tonne.

 

A sharp fall in open interest of the benchmark contract, after it hit its all-time high Tuesday, implied a downward correction ahead, said analysts.

 

In spite of rising cash values, analysts said they were still worried about the pace of feed demand growth.

 

"If feed demand doesn't follow up, futures prices won't be underpinned," Liu said.

 

Total trading volume for all corn contracts fell to 718,616 lots from 907,294 lots Tuesday.