July 26, 2006

 

Wednesday: China soybean futures settle lower on weak demand

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled lower on sluggish demand Wednesday, an analyst said.

 

The benchmark September contract settled RMB13 lower at RMB2,428 a metric tonne, after trading between RMB2,420/tonne and RMB2,440/tonne.

 

Total trading volume rose to 27,746 lots from 23,138 lots Tuesday. One lot is equivalent to 10 tonnes.

 

"Bearishness in the soybean futures market will likely persist, as demand for soybean remains weak and isn't expected to recover within a short period of time," said Zeng Xuezhou, an analyst at Beite Futures Co.

 

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

 

The benchmark September contract settled at RMB2,461/tonne, down RMB18.

 

Soymeal futures also settled lower. The benchmark November 2006 soymeal contract fell RMB10 to settle at RMB2,229/tonne, after trading between RMB2,217/tonne and RMB2,242/tonne.

 

Total trading volume for all soymeal contracts fell to 310,550 lots from 212,614 lots Tuesday.

 

"Spot market prices of soymeal fell below RMB2,000, and this is weighing on soymeal futures," said Zeng.

 

Soyoil futures settled mostly lower. The most active November 2006 soyoil contract shed RMB15 to settle at RMB5,399/tonne.

 

"The Chinese government may impose restrictions on making biofuel with corn or soyoil, as it is struggling to secure China's food supply," Zeng added.

 

Corn futures settled lower. The most widely held May 2007 contract settled at RMB1,412/tonne, down RMB11.

 

"Although long term prospects are rosy, corn futures will continue to fall because of oversupply and week demand in the near future," Zeng said.

 

Total trading volume for corn rose to 442,050 lots from 254,762 lots Tuesday.