September 18, 2007

 

Tuesday: China soybean futures settle up for second day; corn steady

 

 

Soybean futures traded on the Dalian Commodity Exchange settled higher for the second straight session Tuesday due to continuous inflows of speculative money and on the back of overnight gains in Chicago Board Trade soybean futures.

 

The benchmark May 2008 soybean contract settled RMB29 higher at RMB4,154 a metric tonne, after trading between RMB4,130/tonne and RMB4,176/tonne.

 

Total trading volume fell to 774,764 lots from 849,110 lots Monday. One lot is equivalent to 10 tonnes.

 

"Technically, soybean is bracing for further price upsides, and that has drawn follow-through buying in the session," said Liu Xinghua, an analyst with Great Wall Futures Co.

 

Fueling bullish sentiment was speculation by industry players that this year's output figures might be even lower than the China National Grain and Oils Information Center's forecast, Liu said.

 

Traders said as demand for soy products is solid and prices of soybean imports are rising, domestic soybean prices are well underpinned.

 

Soymeal and soyoil futures settled mostly higher, along with soybean futures.

 

The benchmark May 2008 soymeal contract settled RMB56 higher at RMB3,227/tonne. The benchmark May 2008 soyoil contract settled RMB32 higher at RMB8,496/tonne.

 

Corn futures settled almost unchanged. The benchmark May 2008 contract rose RMB1 to settle at RMB1,670/tonne.

 

Trading volume for all corn contracts fell to 511,884 lots from 577,390 lots Monday.

 

"So far, news of a bird flu outbreak in Guangzhou doesn't seem to have affected the bullish sentiment (in agricultural commodities), and as the government is paying great attention to the matter, any possible impact might be limited," said Zhang Yifan, a trader with China Grains & Oils Group Feed Corp.

                                    

Market participants hold divergent views on the output of corn this year.

 

"Although total acreage has increased, the yield is expected to be lower," Zhang said, bolstering the argument for a possible lower corn output this year, Zhang added.