August 24, 2006

 

Thursday: China soybean futures settle down on fresh selling

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly Lower Thursday, pressured by fresh selling, analysts said.

 

The most active January 2007 contract settled RMB1 lower at RMB2,561 a metric tonne, after trading between RMB2,556 and RMB2,569/tonne.

 

Total trading volume fell to 12,692 lots, from 31,336 lots Wednesday. One lot is equivalent to 10 tonnes.

 

"Fresh selling emerged when futures prices rebounded, due to the overstocking and low spot market prices," said Li Honglei, an analyst at Nanhua Futures Co.

 

"Trading volume shrank as investors are waiting for reports on soybean acreage in South America, which will probably come out next month," he added.

 

No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled mostly higher. The benchmark September contract was unchanged at RMB2,466/tonne.

 

Soymeal settled mostly lower. The benchmark January 2007 soymeal contract fell RMB2 to settle at RMB2,266/tonne, after trading between RMB2,260 and RMB2,274/tonne.

 

Total trading volume for soymeal fell to 139,762 lots, from 194,236 lots Wednesday.

 

"Prices for poultry and pork are on rise, however, a recovery in demand for feed has not appeared. Trading volume dropped as investors are watching to see whether feed sales actually pick up," said Liu Xinhua, an analyst at Great Wall Futures Co.

 

Soyoil settled mostly higher. The most widely held November 2006 soyoil contract rose RMB3 to settle at RMB5,471/tonne.

 

"Soyoil futures prices will hold at the current level, with frequent fluctuations expected in coming weeks. A strong rebound is unlikely as futures prices have risen too much recently," Liu said.

 

Corn futures settled lower. The benchmark May 2007 contract settled RMB3 lower at RMB1,419/tonne.

 

Total trading volume for corn fell to 411,858 lots, from 516,030 lots Wednesday.

 

"Although a severe drought hit major corn producing regions in China's Southwest, total output nationwide will not be affected significantly. Market expectations that the fall harvest of corn will still be good put pressure on futures prices," Li added.