August 1, 2006

 

Tuesday: China soybean futures settle lower; spot markets, overstocking

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly lower, pressured by spot market prices and overstocking.

 

The benchmark September contract settled RMB3 lower at RMB2,399 a metric tonne, after trading between RMB2,392 and RMB2,416/tonne.

 

Total trading volume fell to 68,044 lots from 68,674 lots Monday. One lot is equivalent to 10 tonnes.

 

"Spot market prices are around RMB2,000 and stocks of imported soybeans remain huge, so there is still space for further declines in soybean futures prices," Tian Lianfeng, an analyst at Tianma Futures Co.

 

"CBOT opened high but fell in the later session, which was weighing on soybean futures prices," he added.

 

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

 

The benchmark September contract settled at RMB2,452/tonne, down RMB5.

 

Soymeal futures settled lower. The most active January 2007 soymeal contract fell RMB12 to settle at RMB2,289/tonne, after trading between RMB2,278 and RMB2,305/tonne.

 

Total trading volume for all soymeal contracts fell to 258,150 lots from 313,628 lots Monday.

 

"Demand for soymeal remains sluggish. Many local crushing (companies) either closed down or were acquired by foreign grains companies," Tian said.

 

Soyoil futures settled higher. The benchmark November 2006 soyoil contract rose RMB51 to settle at RMB5,585/tonne.

 

"Imports of plant oils dropped considerably this year, lending support to soyoil futures prices," said Tian.

 

Corn futures settled mostly lower. The most widely held May 2007 contract settled at RMB1,418/tonne, down RMB3.

 

"Corn futures prices are holding at a high level, making further downward corrections still probable, Tian added.

 

Total trading volume for corn fell to 211,308 lots from 291,968 lots Monday.