July 27, 2006
Thursday: China soybean futures settle lower on CBOT, oversupply
Soybean futures traded on China's Dalian Commodity Exchange settled lower Thursday on oversupply and CBOT losses, analysts said.
The benchmark September contract settled RMB21 lower at RMB2,407 a metric tonne, after trading between RMB2,385/tonne and RMB2,417/tonne.
Total trading volume rose to 32,536 lots from 27,746 lots Wednesday. One lot is equivalent to 10 tonnes.
"Long position holders are not very confident in soybean futures as the market remains oversupplied - around 4 million tonnes of imported soybeans are stockpiled at major ports," said Liu Xinghua, an analyst at Great Wall Futures Co.
"Losses on CBOT pressured soybean futures prices as well," he added.
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 RMB2,439/tonne, down RMB22.
Soymeal futures also settled lower. The benchmark November 2006 soymeal contract fell RMB13 to settle at RMB2,216/tonne, after trading between RMB2,208/tonne and RMB2,226/tonne.
Total trading volume for all soymeal contracts fell to 236,148 lots from 310,550 lots Wednesday.
"Prices of soymeal futures are relatively higher compared to soybean futures, so there will be arbitrage opportunities if investors sell soymeal futures and buy soybean futures," said Li Honglei, an analyst at Nanhua Futures Co.
Soyoil futures settled mostly higher. The most active November 2006 soyoil contract rose RMB5 to settle at RMB5,404/tonne.
"Prices of rapeseed and palm oil increased, which lent support to soyoil futures," said Liu.
Corn futures settled lower. The most widely held May 2007 contract settled at RMB1,409/tonne, down RMB3.
"Corn futures prices are expected to pick up after days of declines as demand shows signs of recovery," said Gao Yanrong, an analyst at Dalu Futures Co.
Total trading volume for corn fell to 266,194 lots from 442,050 lots Wednesday.
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