August 22, 2006

 

Tuesday: China soybean futures settle mostly down on oversupply

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled lower Tuesday on oversupply, analysts said.

 

The most active January 2007 contract settled RMB1 lower at RMB2,555 a metric tonne, after trading between RMB2,544 and RMB2,569/tonne.

 

Total trading volume rose to 21,362 lots from 17,756 lots Monday. One lot is equivalent to 10 tonnes.

 

"Soybean futures opened lower and climbed a little in the earlier session, supported by rises in spot market prices this week. However, futures prices fell again, due to oversupply," said Li Honglei, an analyst at Nanhua Futures Co.

 

No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled mixed. The benchmark September contract rose RMB9 to RMB2,460/tonne.

 

Soymeal futures settled mostly lower. But the benchmark January 2007 soymeal contract rose RMB5 to settle at RMB2,260/tonne, after trading between RMB2,248 and RMB2,273/tonne.

 

Total trading volume for soymeal rose to 173,470 lots from 161,010 lots Monday.

 

"Prices in the spot market have shown a trend of picking up this week, with demand for pork and poultry expected to recover. Furthermore, freight costs have increased substantially recently, offering some help to soymeal futures," said Li.

 

Soyoil futures settled mostly higher. The most widely held November 2006 soyoil contract rose RMB16 to settle at RMB5,472/tonne.

 

"Soyoil futures performed better compared with soybean and soymeal futures because soyoil's fundamentals remain strong," Li said.

 

Corn futures settled mostly lower. The benchmark May 2007 contract settled RMB6 lower at RMB1,415/tonne.

 

Total trading volume for corn rose to 578,888 lots from 410,850 lots Monday.

 

"In addition to the oversupply situation, the new harvest, which is expected to enter the market in September and October, put more pressure on corn futures," Li added.