August 11, 2006

 

Friday: China soybean futures settle mostly lower; USDA eyed

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly lower Friday, tracking overnight losses on the Chicago Board of Trade.

 

Market participants liquidated their positions ahead of a U.S. crop report, analysts said.

 

"Market participants, as expected, chose to retreat before the USDA report to be released tonneight," said Li Honglei, an analyst at Nanhua Futures Co.

 

The most-widely held September contract settled RMB1 lower at RMB2,388 a metric tonne, after trading between RMB2,386/tonne and RMB2,393/tonne.

 

Total trading volume rose slightly to 42,104 lots from 41,974 lots Thursday.

 

One lot is equivalent to 10 tonnes.

 

The U.S. Department of Agriculture's first survey-based yield and production estimates will be released Friday.

 

"However, even if the report sends a negative signal to CBOT, the domestic market may be supported by smaller soybean acreage this year," Li said.

 

He said the latest research reports indicate a fall of 10% in China's soybean output is quite likely.

 

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

 

The benchmark September contract fell RMB3 to RMB2,450/tonne.

 

Soymeal and soyoil futures also settled mostly lower, following the overnight CBOT losses, analysts said.

 

The benchmark January 2007 soymeal contract fell RMB6 to settle at RMB2,237/tonne, after trading between RMB2,231/tonne and RMB2,245/tonne.

 

The most active January 2007 soyoil contract fell RMB1 to settle at RMB5,692/tonne.

 

Corn futures settled higher, thanks to fresh buying on technical charts and supportive fundamentals, said analysts and traders.

 

The benchmark May 2007 contract settled RMB8 higher at RMB1,392/tonne.

 

Total trading volume for corn fell to 349,378 lots from 430,416 lots Thursday.

 

"With rising prices of poultry, an indication of more demand, feed producers have become active in buying the raw material," said a Beijing-based trader.

 

Corn is mainly used to produce animal feed in China.

 

"Also, low stock levels of feed producers in Guangdong province have become a supportive factor for prices, as earlier inventories have been used up, while the time for the new harvest hasn't arrived yet," said the trader.