August 16, 2006

 

Wednesday: China soybean futures settle higher on e-CBOT gains

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled higher Wednesday, following e-CBOT gains, said an analyst.

 

The most active January 2007 contract settled RMB14 higher at RMB2,536 a metric tonne, after trading between RMB2,524 and RMB2,544/tonne.

 

Total trading volume dropped to 28,800 lots from 34,612 lots Tuesday. One lot is equivalent to 10 tonnes.

 

"Yesterday's rebound in soybean futures prices continued to today, supported by e-CBOT gains," said Liu Xinghua, an analyst at Great Wall Futures Co.

 

"However, oversupply is still serious with large import arrivals stockpiled at major ports, weighing on soybean futures in coming months," he added.

 

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

 

The benchmark September contract rose RMB20 to RMB2,447/tonne.

 

Soymeal settled higher. The benchmark January 2007 soymeal contract rose RMB18 to settle at RMB2,238/tonne, after trading between RMB2,224 and RMB2,246/tonne.

 

Total trading volume for soybeans fell to 179,282 lots from 179,756 lots Tuesday.

 

"In line with soybean futures, rises in soymeal futures prices were supported by e-CBOT gains," Liu said

 

"Recent increases in prices for pork and poultry also offered some support to soymeal futures. Nevertheless, whether demand for soymeal will recover is still unclear," he added.

 

Soyoil settled mostly higher. The most widely held November 2006 soyoil contract rose RMB27 to settle at RMB5,510/tonne.

 

"Today's rebound is an upward correction after days of declines. Recent retreats in soyoil futures prices are not expected to last as demand for soyoil holds stable and prices of imports are on a rise," Liu said.

 

Corn futures settled mostly higher. The benchmark May 2007 contract settled RMB7 higher at RMB1,400/tonne.

 

Total trading volume for corn rose to 372,046 lots from 287,652 lots Tuesday.

 

"Corn output will probably fall this year as drought in corn producing regions in the southwest worsens. In addition, rises in spot market prices this week added to the positive market sentiment. The rebound in corn futures may continue for a couple of days as current prices remain at a low level," Liu added.