July 20, 2006

 

Thursday: China soybean futures settle higher, upward correction

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled higher on an upward correction Thursday, after losses in the past few days, an analyst said.

 

The benchmark September contract settled RMB5 higher at RMB2,475 a metric tonne, after trading between RMB2,467 and RMB2,488/tonne.

 

Total trading volume for all soybean contracts fell to 12,810 lots from 19,928 lots Wednesday. One lot is equivalent to 10 tonnes.

 

"Soybean futures have incurred losses in recent days - today's rebound is just an upward correction," said Liu Xinghua, an analyst at Great Wall Futures Co.

 

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

 

The benchmark September contract settled at RMB2,499/tonne, up RMB8.

 

Soymeal futures settled mostly higher. The benchmark November 2006 soymeal contract rose RMB5 to settle at RMB2,277/tonne, after trading between RMB2,271 and RMB2,282/tonne.

 

Total trading volume for all soymeal contracts fell to 128,478 lots from 198,166 lots Wednesday.

 

"Soymeal futures prices also experienced an upward correction, in line with soybeans," said Liu.

 

Soyoil futures settled mostly lower. The most active September 2006 soyoil contract fell RMB21 to settle at RMB5,216/tonne.

 

"Although soyoil futures settled lower today, soyoil's fundamentals remain strong. Crushers have cut production in a bid to curb an oversupply of soymeal, causing the output of soyoil to decline, but demand for soyoil remains unchanged," Liu added.

 

Corn futures settled higher. The most widely held March 2007 contract settled at RMB1,423/tonne, up RMB2.

 

"Corn futures will not rise too much, as weak demand and increased production will pressure prices," Liu said

 

Total trading volume for corn contracts fell to 232,922 lots from 310,300 lots Wednesday.