September 21, 2006

 

Thursday: China soybean futures settle higher on CBOT gains

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled higher Thursday, supported by overnight gains on the Chicago Board of Trade, analysts said.

 

The benchmark January 2007 contract settled RMB3 higher at RMB2,545 a metric tonne, after trading between RMB2,542/tonne and RMB2,552/tonne.

 

Total trading volume fell to 8,522 lots from 13,292 lots Wednesday. One lot is equivalent to 10 tonnes.

 

"Soybean futures prices rose moderately today on CBOT gains. But the trading volume remained thin, showing investors are still cautious, waiting for the new harvest," said Kang Bing, an analyst at Jingyi Future Co.

 

No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled lower. The most active January 2007 contract fell RMB26 to settle at RMB2,521/tonne.

 

Soymeal futures settled mostly higher. The benchmark January 2007 contract rose RMB4/tonne to settle at RMB2,226/tonne, after trading between RMB2,223/tonne and RMB2,233/tonne.

 

Total trading volume for soymeal fell to 51,178 lots from 76,600 lots Wednesday.

 

"Futures prices recovered from yesterday's losses a little bit, finding support from small price rises on the spot market this week," said Zeng Xuezhou, an analyst at Beite Futures Co.

 

"With fundamentals little changed, soymeal futures will probably hold at the current level, with frequent fluctuations in the coming weeks," Kang added.

 

Soyoil settled lower. The benchmark January 2007 contract fell RMB26 to settle at RMB5,541/tonne.

 

"Losses in crude oil prices on the international market weighed on soyoil futures. Whether futures will retreat further depends on prices on the spot market," said Kang.

 

Corn futures settled mostly down. The benchmark May 2007 contract settled at RMB1,399/tonne, down RMB6/tonne.

 

Total trading volume for corn rose to 234,362 lots from 222,088 lots Wednesday.

 

"Downside pressure may linger on, as the new harvest is widely expected to be good," Zeng said.

 

Kang concurred with Zeng, adding "Prices for the early harvest of corn that has appeared in the market in the central provinces lately were lower than expected, adding to bearish market sentiment."