August 15, 2006

 

Tuesday: China soybean futures settle higher on upward correction

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled higher Tuesday on an upward correction, said an analyst.

 

The most active January 2007 contract settled RMB2 higher at RMB2,522 a metric tonne, after trading between RMB2,512 and RMB2,530/tonne.

 

Total trading volume dropped to 34,612 lots from 52,346 lots Monday. One lot is equivalent to 10 tonnes.

 

"Current soybean futures prices are pretty low, due to previous losses. Today's rebound is a small upward correction," said Zeng Xuezhou, an analyst at Beite Futures Co.

 

"The rebound may not continue and as soybean's fundamentals remain weak," 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 fell RMB17 to RMB2,427/tonne.

 

Soymeal settled mostly higher. The benchmark January 2007 soymeal contract rose RMB8 to settle at RMB2,220/tonne, after trading between RMB2,215 and RMB2,228/tonne.

 

Total trading volume for soybeans fell to 179,756 lots from 202,634 lots Monday.

 

"Soymeal futures prices rose, in step with soybean futures and supported by CBOT gains," Zeng said

 

"However, the rebound may not last as spot market prices of soymeal continue to fall, weighing on soymeal futures," Zeng added.

 

Soyoil settled mostly lower. The most widely held November 2006 soyoil contract fell RMB28 to settle at RMB5,483/tonne.

 

"Soyoil futures prices continued to fall, pressured by recent retreats in crude oil prices. In addition, supply of soyoil is abundant, contributing to soyoil futures losses," Zeng said.

 

Corn futures settled higher. The benchmark May 2007 contract settled RMB10 higher at RMB1,393/tonne.

 

Total trading volume for corn fell to 287,652 lots from 339,652 lots Monday.

 

"Corn futures prices picked up today, supported by weather forecasts for drought and increases in spot market prices in some corn producing regions," Zeng said.

 

"Corn futures are expected to pick up in a long run as the demand for corn keeps rising. However, corn futures prices will hold at low level with frequent fluctuations before October, when new harvest of corn enters the market," Zeng added.