June 15, 2005

Wednesday: China soybean futures settle higher on CBOT rally; corn up

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher in slow trading Wednesday, following a rally overnight in Chicago Board of Trade soybean futures.

 

The benchmark September 2005 soybean contract recouped Tuesday's losses as it rose RMB7 a metric ton to settle at RMB3,093/ton, after trading between RMB3,086/ton and RMB3,105/ton.

 

Trading volume in the Dalian soybean futures market increased to 168,416 lots from 144,958 lots Tuesday. One lot is equivalent to 10 tonnes.

 

Gains in near-month contracts were smaller than those in forward-delivery contracts, and the local market in general underperformed the CBOT, reflecting some worries over ample soybean imports in the near term, analysts said.

 

In January-to-May, China imported 9.35 million tonnes of soybeans, up 25% on year, according to recent data from the customs department.

 

Many analysts said they are expecting even more imports in the coming months, judging by the contracts signed and shipments planned.

 

Also, the U.S. department said recently that it estimates China will import a record 27 million tonnes of soybeans in the 2005-06 marketing year, which begins in September 2005. This is 4.2 million tonnes more than its current estimate of 22.8 million tonnes for 2004-05.

 

But demand for soy products, soyoil and soymeal has been sluggish in the past several months. Some analysts said they are unsure whether soy product prices will recover in the coming months after recent declines.

 

Analysts said the performance of the cash market will have an impact on futures prices.

 

The No. 2 soybean contracts, which can be delivered with soybeans harvested from genetically modified crops, settled mostly higher, with the benchmark September No. 2 contract rising RMB22/ton to settle at RMB3,010/ton on a single trade of 2 lots.

 

Dalian's soymeal futures contracts settled higher, in line with soybeans. The benchmark August 2005 soymeal contract, which is also the nearby contract, gained RMB19/ton to settle at RMB2,729/ton, after trading in a narrow range of RMB2,721-RMB2,738/ton.

 

Active long buying was seen in the September 2005 contract, which gained RMB35/ton to settle at RMB2,743/ton.

 

Corn futures traded on the exchange settled mostly higher, but trading was listless on a lack of leads.

 

The benchmark September corn contract rose RMB2/ton to settle at RMB1,297/ton, after trading between RMB1,295/ton and RMB1,299/ton.

 

China's futures trading is off-limits to foreign investors.