September 26, 2006

 

Tuesday: China soybean futures settle mostly higher on tight supply

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Tuesday, on tight supply and rising import costs.

 

The benchmark May 2008 soybean contract settled RMB87 higher at RMB3,884 a metric tonne.

 

Total trading volume rose to 868,592 lots from 325,940 lots Monday. One lot is equivalent to 10 tonnes.

 

Limited domestic soybean stocks and rising imported soybean prices have pushed soybean cash prices higher.

 

Analysts said soybean supply will continue to be tight as domestic output is expected to decline on forecasts of severe drought and early frost.

 

However, domestic soybean prices are unlikely to rise much without the support of their counterparts on Chicago Board of Trade, said Fu Jianjun, a researcher at Miracle China Futures Brokerage.

 

The benchmark May 2008 contract is likely to briefly rise above RMB4,000/tonne within about a week, before falling below that level again, he added.

 

Soymeal and soyoil futures settled higher.

 

The benchmark May 2008 soymeal contract settled RMB61 higher at RMB3,080/tonne, and the benchmark January 2008 soyoil contract settled RMB16 higher at RMB8,046/tonne.

 

Corn futures also settled mostly higher.

 

The benchmark May 2008 contract settled RMB16 higher at RMB1,653/tonne.

 

However, corn gains will likely be capped, as its output is likely to remain stable despite a drought in northeast corn-growing areas, said Zhang Yifan, a trader at China Grains & Oils Group Feed Corp.

 

Trading volume for all corn contracts rose to 920,678 lots from 505,434 lots Monday.