July 31, 2006

 

Monday: China soybean futures settle higher on CBOT gains

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled higher Monday, following Friday's CBOT gains, analysts said.

 

The benchmark September contract settled RMB32 higher at RMB2,402 a metric tonne, after trading between RMB2,372 and RMB2,425/tonne.

 

Total trading volume fell to 68,674 lots from 71,432 lots Friday. One lot is equivalent to 10 tonnes.

 

"Weather forecasts indicate that a drought may occur in major soybean producing regions of the U.S. The expectation that the rise on CBOT will continue lent support to soybean futures on the Dalian Commodity Exchange," said Li Honglei, an analyst at Nanhua Futures Co.

 

"However, soybean stocks in Dalian are still around 1 million tonnes, which will be weighing on soybean futures in August and September," he added.

 

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

 

The benchmark September contract settled at RMB2,457/tonne, up RMB20.

 

Soymeal futures also settled mostly higher. The most active January 2007 soymeal contract rose RMB24 to settle at RMB2,301/tonne, after trading between RMB2,286 and RMB2,315/tonne.

 

Total trading volume for all soymeal contracts rose to 313,628 lots from 279,456 lots Friday.

 

"The rebound in soymeal futures may not last for long, as soymeal is made from imported soybeans, supplies of which are abundant," said Liu.

 

Soyoil futures settled higher. The benchmark November 2006 soyoil contract rose RMB123 to settle at RMB5,534/tonne.

 

"Although soyoil futures' gains were considerable, arbitrage opportunities were limited for soyoil futures, with a thin trading volume," said Liu.

 

Corn futures settled higher. The most widely held May 2007 contract settled at RMB1,421/tonne, up RMB6.

 

"Corn production is expected to increase by 10%-20% this year, which will pressure corn futures later this year," Liu added.

 

Total trading volume for corn rose to 291,968 lots from 248,064 lots Friday.