August 9, 2006

 

Wednesday: China soybean futures settle higher on upward correction

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly higher Wednesday on an upward correction.

 

The benchmark September contract settled RMB3 higher at RMB2,393 a metric tonne, after trading between RMB2,382 and RMB2,400/tonne.

 

Total trading volume fell to 36,946 lots from 45,918 lots Tuesday. One lot is equivalent to 10 tonnes.

 

"It's a small upward correction after days of declines," said Dong Liang, an analyst at Shanghai Jiuheng Futures Co.

 

"Trading was quiet as investors were waiting for Friday, when the U.S. Department of Agriculture plans to publish its monthly report on supply and demand," he added.

 

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

 

The benchmark September contract settled at RMB2,456/tonne, down RMB12.

 

Soymeal futures settled mostly higher. The most active January 2007 soymeal contract rose RMB6 to settle at RMB2,246/tonne, after trading between RMB2,239 and RMB2,255/tonne.

 

Total trading volume for all soymeal contracts fell to 152,846 lots from 194,604 lots Tuesday.

 

"Demand showed signs of a recovery as prices for pork and poultry started increasing, but it wasn't strong enough to foster a full-blown rebound," Dong said.

 

Soyoil futures settled higher. The benchmark November 2006 soyoil contract rose RMB33 to settle at RMB5,578/tonne.

 

"Soyoil prices increased in the spot market recently, providing support to soyoil futures," Dong added.

 

Corn futures settled higher. The most widely held May 2007 contract settled at RMB1,388/tonne, up RMB2.

 

"Although the oversupply will continue with the new harvest entering the market, demand for corn is relatively higher compared with that for soybeans, which are also suffering from overstocking," Dong said.

 

Total trading volume for corn fell to 202,224 lots from 321,268 lots Tuesday.