August 30, 2006

 

Wednesday: China soybean futures settle up on upward correction

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled higher Wednesday on an upward correction, analysts said.

 

The most active January 2007 contract settled RMB6 higher at RMB2,530 a metric tonne, after trading between RMB2,521/tonne and RMB2,535/tonne.

 

Total trading volume fell to 18,316 lots from 20,982 lots Tuesday. One lot is equivalent to 10 tonnes.

 

"It's an upward correction, after days of retreats," said Zhang Yifan, an analyst at China Grains & Oils Group Feed Corp.

 

Liu Xinghua, an analyst at Great Wall Futures Co., said market expectation that demand for soybeans would recover in the fall lent some support to futures.

 

"Investors still expect a major rebound in demand for soybeans in the fall. Some fresh buying was witnessed in the late session today," Liu said.

 

No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled lower. The benchmark September contract fell RMB9/tonne to RMB2,470/tonne.

 

Soymeal futures settled mostly higher. The benchmark January 2007 contract rose RMB2 to settle at RMB2,229/tonne, after trading between RMB2,225/tonne and RMB2,235/tonne.

 

Total trading volume for soymeal fell to 84,690 lots from 110,662 lots Tuesday.

 

"In addition to the expected recovery in demand for feed in the fall, import arrivals of soybeans, estimated to be less than 1.6 million tonnes in September, also helped soymeal futures," Zhang said.

 

Soyoil settled mostly lower. The most widely held November 2006 contract fell RMB22 to settle at RMB5,442/tonne.

 

"Soyoil futures kept falling this week, following losses in international crude oil prices," Liu said.

 

Corn futures settled lower. The benchmark May 2007 contract settled RMB10 lower at RMB1,394/tonne.

 

Total trading volume for corn dropped to 394,214 lots from 772,978 lots Tuesday.

 

"The retreat in corn futures extended to today due to technical weakness. Prices fell on long liquidation. The loss will probably continue as market sentiment is cautious before the new harvest in October and November," Liu added.