September 7, 2006

 

Thursday: China soybean futures settle down on CBOT losses

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled lower Thursday, pressured by overnight losses on the Chicago Board of Trade, analysts said.

 

The most active January 2007 contract settled RMB19 lower at RMB2,546 a metric tonne, after trading between RMB2,536/tonne and RMB2,559/tonne.

 

Total trading volume rose to 28,048 lots from 26,212 lots Wednesday. One lot is equivalent to 10 tonnes.

 

"Soybean futures prices dropped, tracking CBOT losses," said Zhang Yifan, an analyst at China Grains & Oils Group Feed Co.

 

"CBOT performance will have a major impact on soybean futures in the short term," said Gao Yanrong, an analyst at Dalu Futures Co.

 

No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled mostly lower. The benchmark September contract settled at RMB2,528/tonne, down RMB77/tonne.

 

Soymeal futures settled mostly lower. The benchmark January 2007 contract dropped RMB30/tonne to settle at RMB2,237/tonne, after trading between RMB2,226/tonne and RMB2,253/tonne.

 

Total trading volume for soymeal rose to 218,744 lots from 176,718 lots Wednesday.

 

"Soymeal futures prices fell on long liquidation. Demand has not shown signs of a strong recovery yet. Moreover, a large volume of imported soybeans is still stockpiled at major ports, weighing on investor confidence," said Zhang.

 

Soyoil settled mostly lower. The most widely held January 2007 contract fell RMB18 to settle at RMB5,585/tonne.

 

"Space for further losses is thin as demand for soyoil is stable and is expected to pick up in the fall," Gao added.

 

Corn futures settled mostly higher. The benchmark May 2007 contract settled at RMB1,411/tonne, up RMB1/tonne.

 

Total trading volume for corn rose to 345,380 lots from 340,014 lots Wednesday.

 

"Early frosts that hit some areas in Heilongjiang province (a major corn producing region) this week, offered some help to futures. In addition, Chinese corn is gaining a competitive advantage over corn from the U.S., thanks to higher freight costs," Zhang added.

 

The market may expect China to resume corn exports on a large scale in the near future, Zhang added.