September 6, 2007

 

Thursday: China soybean futures settle mixed; seeking new direction

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mixed Thursday, as the market took a breather following recent strong growth.

 

The benchmark May 2008 soybean contract settled RMB6 lower at RMB3,873 a metric tonne.

 

Total trading volume declined to 420,568 lots from 754,296 lots Wednesday. One lot is equivalent to 10 tonnes.

 

The contracts on Dalian will likely consolidate around current levels pending new direction, traders said.

 

However, if soybean futures at the Chicago Board of Trade don't rise further, Dalian soybeans are unlikely to have much strength to rise either, said Wang Xiaoguang, an analyst at Galaxy Futures.

 

Domestic soybean cash prices remain stable, as the market is awaiting fresh soybeans ahead of the harvest season beginning later this month.

 

Rising demand for edible soybeans and a reduction in domestic soybean output will likely push locally-grown non-genetically modified soybean prices to RMB3,800/tonne by year end, up from RMB3,300-RMB3,400/tonne, Shanghai JCI said.

 

Soymeal futures settled mostly higher, but soyoil futures settled lower.

 

The benchmark May 2008 soymeal contract settled RMB2 higher at RMB3,066/tonne, while the benchmark January 2008 soyoil contract settled RMB26 lower at RMB8,004/tonne.

 

Corn futures settled mostly lower.

 

The benchmark May 2008 contract settled RMB4 lower at RMB1,633/tonne.

 

Some analysts expect corn prices to face upward pressure as the harvest season is approaching, and output is unlikely to decline on year despite a drought.

 

Trading volume for all corn contracts declined to 604,748 lots from 666,380 lots Wednesday.