June 22, 2007

 

Friday: China soybean futures settle down on CBOT; soymeal demand key

 

 

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

 

The benchmark January 2008 soybean contract settled RMB39 lower at RMB3,244 a metric tonne.

 

Total trading volume rose to 174,718 lots from 115,576 lots Thursday. One lot is equivalent to 10 tonnes.

 

Bearish weather forecasts drove CBOT soybean futures deep into negative territory Thursday, triggering sell stops and technical liquidation along the way as prices slipped before a key moving average.

 

Midday weather forecasts predicted larger rainfall totals for the U.S. eastern Midwest this weekend, a bearish development as the precipitation is expected to ease dryness and give a boost to the developing crop.

 

Meanwhile, ample soybean supply and sluggish demand for soymeal kept domestic traders on sidelines.

 

The prerequisite for Dalian soybean contracts to rise is continued growth in soymeal demand, said Yide Futures.

 

The outbreak of blue-ear disease last year has reduced the number of pigs, and demand from feedmeal sector has been sluggish as a result.

 

Soymeal futures and soyoil futures also settled mostly lower.

 

The benchmark September 2007 soymeal contract settled RMB28 lower at RMB2,480/tonne, while the benchmark September 2007 soyoil contract settled RMB72 lower at RMB7,564/tonne.

 

Corn futures settled lower.

 

The benchmark September 2007 contract settled RMB7 lower at RMB1,587/tonne.

 

Traders said corn futures are likely to consolidate around current levels, waiting for more clear trading guidance.

 

Trading volume for all corn contracts declined to 255,912 lots from 257,642 lots Thursday.