July 5, 2006

 

Wednesday: China soybean futures settle lower on oversupply; corn down

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled lower Wednesday in an oversupplied market, while losses in other commodities also pressured prices.

 

The benchmark September contract fell RMB7 to settle at RMB2,582 a metric tonne, after trading between RMB2,568/tonne and RMB2,597/tonne.

 

Total trading volume for all soybean contracts rose to 26,158 lots from 17,096 lots Tuesday.

 

One lot is equivalent to 10 tonnes.

 

No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled lower.

 

The benchmark September contract fell RMB6 to settle at RMB2,515/tonne.

 

"With the U.S. market closed Tuesday, soy futures are under heavy pressure due to large amounts of imports in recent months," said Zeng Xuezhou, an analyst at Beite Futures Co.

 

"Meanwhile, there is no supportive factor in terms of weather conditions in the U.S., and if this continues to be the case in July and August, soy and corn futures are likely to fall further, given the fundamentals," Zeng said.

 

Soymeal and soyoil futures settled mostly lower, in step with soybean futures.

 

The benchmark November 2006 soymeal contract fell RMB12 to settle at RMB2,315/tonne, after trading between RMB2,303/tonne and RMB2,332/tonne.

 

Total trading volume for all soymeal contracts fell to 251,362 lots from 280,526 lots Tuesday.

 

The most widely held September 2006 soyoil contract settled RMB5 lower at RMB5,190/tonne.

 

Corn futures settled lower, with cash values weighed down by sluggish feed demand and increased use of wheat to replace corn in feed production, due to high prices, analysts said.

 

The benchmark March 2007 contract settled at RMB1,462/tonne, down RMB13.

 

Total trading volume for all corn contracts rose to 564,848 lots from 416,582 lots.