August 7, 2007

 

Tuesday: China soybean futures settle down on CBOT fall; cautious trading

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly lower Tuesday, tracking the overnight decline on the Chicago Board of Trade.

 

The benchmark January 2008 soybean contract settled RMB16 lower at RMB3,419 a metric tonne.

 

Total trading volume declined to 375,528 lots from 560,488 lots Monday. One lot is equivalent to 10 tonnes.

 

The recent drought in China's northeast major soybean and corn producing region has pushed soybean prices higher on concerns of reduced supply.

 

However, as imported soybeans account for about 60% of China's soybean consumption, the reduced domestic output only has some psychological impact on the market.

 

"(We) are cautious about pushing soybean prices too high before the (CBOT) shows signs of a clear trend," said Gao Yanrong, a trader at Dalu Futures Co.

 

CBOT soybean futures ended lower Monday, posting double digit declines, as the market extracted weather premium following beneficial weekend rains in dry areas of the Midwest.

 

Soymeal futures and soyoil futures settled mostly lower.

 

The benchmark January 2008 soymeal contract settled RMB1 higher at RMB2,647/tonne, while the benchmark January 2008 soyoil contract settled RMB92 lower at RMB8,236/tonne.

 

Corn futures also settled lower.

 

The benchmark January 2008 contract settled RMB14 lower at RMB1,543/tonne.

 

Corn prices have risen sharply in recent times due to drought concerns, but the fundamentals of oversupply this year haven't changed, analysts said.

 

Wang Xiaohui, head of the China National Grain and Oils Information Center's market monitoring department, said in a recent research note that he maintains his earlier corn output forecast of 149 million tonnes this year.

 

Trading volume for all corn contracts declined to 580,596 lots from 672,770 lots Monday.