September 5, 2006

 

Tuesday: China soybean futures settle up on stronger demand

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled higher Tuesday on a recovery in demand, analysts said.

 

The most active January 2007 contract settled RMB3 higher at RMB2,548 a metric tonne, after trading between RMB2,539 and RMB2,554/tonne.

 

Total trading volume rose to 13,844 lots from 13,472 lots Monday. One lot is equivalent to 10 tonnes.

 

"In addition to higher demand, import arrivals, stockpiled at major ports, have started to decline since the beginning of this month, lending support to soybean futures," said Zeng Xuezhou, an analyst at Beite Futures Co.

 

"Trading was relatively quiet as investors were cautious, waiting to see CBOT's performance after the Labor Day holiday," added Zhang Yifan, an analyst at China Grains and Oils Group Feed Co.

 

No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, also settled higher. The benchmark September contract settled at RMB2,520/tonne, up RMB32/tonne.

 

Soymeal futures settled mostly higher. The benchmark January 2007 contract rose RMB4 to settle at RMB2,242/tonne, after trading between RMB2,234 and RMB2,250/tonne.

 

Total trading volume for soymeal fell to 91,888 lots from 105,702 lots Monday.

 

"Futures are performing better lately, as soymeal's fundamentals have improved, with demand for feed expected to pick up in the fall," Zhang said.

 

Soyoil settled mostly higher. The most widely held January 2007 contract rose RMB22 to settle at RMB5,595/tonne.

 

"It's an upward correction on yesterday's loss. Soyoil futures will fluctuate around the current level in the near future," Zeng said.

 

Corn futures settled higher. The benchmark May 2007 contract settled at RMB1,401/tonne, up RMB6.

 

Total trading volume for corn fell to 216,214 lots from 294,726 lots Monday.

 

"Trading volume shrank amid the uncertain market sentiment. But investors were building up positions for trading after the new harvest enters the market," Zeng added.