September 25, 2006

 

Monday: China soybean futures settle mostly lower on oversupply

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly lower Monday amid oversupplied conditions.

 

The benchmark January 2007 contract settled RMB17 lower at RMB2,535 a metric tonne, after trading between RMB2,530/tonne and RMB2,542/tonne.

 

Total trading volume rose to 11,064 lots from 9,526 lots Friday. One lot is equivalent to 10 tonnes.

 

"Farmers and state warehouses are still holding around 2 million tonnes of soybeans from old crops in Heilongjiang province, according to local traders," said Li Honglei, an analyst at Nanhua Futures Co.

 

Heilongjiang is a major soybean-producing region in China.

 

"The volume of import arrivals stockpiled at major ports is around 3.5 million tonnes this week," Li added.

 

"In addition, weather forecasts are good for the next two weeks, providing no support to soybean futures," he said.

 

Liu Xinghua, an analyst at Great Wall Futures Co., said the Chicago Board of Trade's performance has had a sizable impact on soybean futures.

 

"(Soybean) futures prices fell today, tracking CBOT losses Friday," Liu said.

 

No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled mixed. The most active July 2007 contract dropped RMB65 to RMB2,565/tonne.

 

Soymeal futures settled lower. The benchmark January 2007 contract fell RMB21 to settle at RMB2,215/tonne, after trading between RMB2,205/tonne and RMB2,220/tonne.

 

Total trading volume for soymeal rose to 82,738 lots from 56,688 lots Friday.

 

"The pre-holiday buying spree is about to end as the week-long National Day holiday is only a week away. Demand has started to fall," Li said.

 

Soyoil settled lower. The benchmark January 2007 contract fell RMB79 to RMB5,474/tonne.

 

"Imports of edible oils surged in August and September, weighing on soyoil futures prices," said Li.

 

Corn futures settled lower, along with soy futures. The benchmark May 2007 contract settled at RMB1,394/tonne, down RMB9.

 

Total trading volume for corn dropped to 237,738 lots from 289,894 lots Friday.

 

"The prices for the early harvest of corn that has appeared in the market in the central provinces aren't as good as expected, pressuring futures prices," added Liu.