July 18, 2007

 

Wednesday: China soybean futures settle down on CBOT decline

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday after their counterparts at the Chicago Board of Trade posted sizable declines for the second consecutive day Tuesday.

 

The benchmark January 2008 soybean contract settled RMB5 lower at RMB3,309 a metric tonne.

 

Total trading volume declined to 170,164 lots from 188,196 lots Tuesday. One lot is equivalent to 10 tonnes.

 

CBOT soybean futures extended their retreat from previous gains on speculative liquidation amid favorable near-term weather outlooks.

 

China's feedmeal demand will likely stay sluggish in the near term as it takes time for the recovery of its pig supply.

 

China said the shortage in pork will remain for some time to come.

 

Soymeal futures settled lower but soyoil futures settled higher.

 

The benchmark January 2008 soymeal contract settled RMB17 lower at RMB2,619/tonne, while the benchmark September 2007 soyoil contract settled RMB66 higher at RMB8,080/tonne.

 

Li Honglei, a trader at Nanhua Futures Co., expects soyoil prices to remain strong in the longer run on rising imported soybean prices and freight fees.

 

Corn futures settled mixed.

 

The benchmark January 2008 contract settled RMB2 higher at RMB1,505/tonne.

 

Trading volume for all corn contracts declined to 322,152 lots from 520,504 lots Tuesday.

 

China repeated this week it will strictly control the development of its corn processing sector and corn exports.

 

It said new corn processing projects must be stopped, and projects under construction will be checked.

 

Traders expect corn supply to exceed demand later this year, putting pressure on corn prices.