September 13, 2006

 

Wednesday: China soybean futures settle mostly down on CBOT retreat

 

 

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

 

The most active January 2007 contract settled RMB5 lower at RMB2,538 a metric tonne, after trading between RMB2,525/tonne and RMB2,552/tonne.

 

Total trading volume rose to 22,876 lots from 16,462 lots Tuesday. One lot is equivalent to 10 tonnes.

 

"Soybean futures dropped, in step with CBOT losses," said Zhang Yifan, a trader at China Grains & Oils Group Feed Corp.

 

Gao Yanrong, an analyst at Dalu Futures Co. agreed with Zhang, adding "futures prices, holding at a relatively low level, are expected to rebound in the near future if CBOT does not drop further, as demand has started to recover."

 

No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled mostly lower. However, the benchmark September contract settled at RMB2,480/tonne, up RMB10.

 

Soymeal futures settled lower. The benchmark January 2007 contract dropped RMB2/tonne to settle at RMB2,216/tonne, after trading between RMB2,198/tonne and RMB2,232/tonne.

 

Total trading volume for soymeal rose to 237,444 lots from 129,228 lots Tuesday.

 

"Soymeal opened lower on CBOT losses and climbed up in the late session, supported by fresh buying," Zhang said.

 

"Investors built up positions, showing they are pretty bullish about soymeal futures, with demand for feed showing a clear trend of picking up," Gao said.

 

Soyoil settled lower. The most widely held January 2007 contract fell RMB18 to settle at RMB5,648/tonne.

 

"Soyoil futures retreated today, thanks to days of declines in international crude oil prices," Zhang said.

 

Corn futures settled lower, with the benchmark May 2007 contract settling at RMB1,403/tonne, down RMB3/tonne.

 

The total trading volume for corn rose to 245,166 lots from 203,840 lots Tuesday.

 

"Corn futures opened lower, but ended high on long buying. Some investors believed that the new harvest may not be as good as expected due to unfavorable weather conditions, providing support to futures," Zhang added.