August 17, 2006

 

Thursday: China soybean futures settle mostly lower on CBOT losses

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly lower Thursday, in line with overnight losses at the Chicago Board of Trade, analysts said.

 

The most active January 2007 contract settled RMB1 lower at RMB2,535 a metric tonne, after trading between RMB2,521 and RMB2,543/tonne.

 

Total trading volume shrank to 27,448 lots from 28,800 lots Wednesday. One lot is equivalent to 10 tonnes.

 

"Soybean futures opened lower, pressured by CBOT losses," said Dong Liang, an analyst at Shanghai Jiuheng Futures Co.

 

Futures pushed higher later on short covering, according to Gao Yanrong, an analyst at Dalu Futures Co.

 

"Trading volume dropped further, as investors are awaiting September deliveries," Dong added.

 

No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled mostly lower, but the benchmark September contract rose RMB8 to RMB2,455/tonne.

 

Soymeal settled mostly lower. The benchmark January 2007 soymeal contract fell RMB3 to settle at RMB2,235/tonne, after trading between RMB2,222 and RMB2,247/tonne.

 

Total trading volume for soymeal fell to 160,894 lots from 179,282 lots Wednesday.

 

"Soymeal futures prices are close to sinking to the bottom of the recent trading range, and are expected to rebound as prices on the spot market show signs of recovery," said Dong.

 

"Soybean imports will decline in August and September, providing some support to the market's confidence in soymeal futures," Gao said.

 

Soyoil settled mostly lower. The most widely held November 2006 soyoil contract fell RMB28 to settle at RMB5,482/tonne.

 

"Despite fluctuations in soyoil futures prices recently, soyoil prices on the spot market have held stable with signs of picking up, indicating limited space for futures losses in the near future," Dong said.

 

Corn futures settled higher. The benchmark May 2007 contract settled RMB5 higher at RMB1,405/tonne.

 

Total trading volume for corn rose to 471,718 lots from 372,046 lots Wednesday.

 

"Corn futures prices are close to spot market prices, after losses in the past two months. Demand for corn is expected to surge as a bunch of large corn processing plants are scheduled to begin operations later this year or next year. Prices will probably continue to rise on strong fundamentals," Dong added.