August 23, 2006

 

Wednesday: China soybean futures settle higher on CBOT gains

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled higher Wednesday, following overnight gains on the Chicago Board of Trade, analysts said.

 

The most active January 2007 contract settled RMB7 higher at RMB2,562 a metric tonne, after trading between RMB2,555 and RMB2,570/tonne.

 

Total trading volume rose to 31,336 lots from 21,362 lots Tuesday. One lot is equivalent to 10 tonnes.

 

"Soybean futures prices rose moderately, supported by CBOT gains and spillover effects of soymeal futures rises," said Shi Junfeng, an analyst at Tianma Futures Co.

 

"Soybean futures prices will remain at low levels with frequent fluctuations in coming weeks," said Gao Yanrong, an analyst at Dalu 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 RMB6 to RMB2,466/tonne.

 

Soymeal settled mostly higher. The benchmark January 2007 soymeal contract rose RMB8 to settle at RMB2,268/tonne, after trading between RMB2,262 and RMB2,278/tonne.

 

Total trading volume for soymeal rose to 194,236 lots from 173,470 lots Tuesday.

 

"Soymeal prices on both spot and futures markets jumped, driven mainly by rising costs. Rising freight costs have pushed up prices for imported soybeans, the main raw material for local crushing companies," Shi said.

 

"On the other hand, although prices for pork and poultry kept increasing recently, demand for feed hasn't recovered yet," Shi added.

 

Soyoil settled mostly lower. The most widely held November 2006 soyoil contract fell RMB4 to settle at RMB5,468/tonne.

 

"Prices for palm oil fell on the international market, weighing on soyoil futures this week. Moreover, demand for soyoil isn't as strong as expected on the domestic market," Shi said.

 

Corn futures settled higher. The benchmark May 2007 contract settled RMB7 higher at RMB1,422/tonne.

 

Total trading volume for corn fell to 516,030 lots from 578,888 lots Tuesday.

 

"Corn prices rose today on an upward correction, after days of declines. However, a full blown rebound will not be probable as investors are waiting to see the new harvest, which is about to arrive on the market on a large scale in October," Gao added.