September 27, 2006

 

Wednesday: China soybean futures settled down amid cautious sentiment

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly lower, as investors were prudent before the week-long National Day holidays, an analyst said.

 

The benchmark January 2007 contract settled RMB6 lower at RMB2,535 a metric tonne, after trading between RMB2,530/tonne and RMB2,541/tonne.

 

Total trading volume dropped to 7,362 lots from 9,976 lots Tuesday. One lot is equivalent to 10 tonnes.

 

"The trading volume continued to decline amid cautious market sentiment. Investors liquidated positions before the week-long National Day holidays, during which the Chicago Board of Trading will have five trading days," said Zeng Xuezhou at Beite Futures Co.

 

China's Dalian Commodity Exchange will close during the National Day holidays from Oct. 1-7.

 

No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled lower. But the benchmark November 2006 contract remained unchanged at RMB2,500/tonne.

 

Soymeal futures settled lower. But the benchmark January 2007 contract fell RMB7 to RMB2,208/tonne, after trading between RMB2,202/tonne and RMB2,215/tonne.

 

Total trading volume for soymeal rose to 82,134 lots from 50,434 lots Tuesday.

 

"The fundamentals of soymeal remain largely unchanged, despite small increases in demand witnessed in some regions recently. The market is concerned that the new harvest of soybean might worsen the current oversupply situation," Zeng said.

 

Soyoil settled lower, with the benchmark January 2007 contract down RMB36 at RMB5,437/tonne.

 

"Demand for edible oils is expected to fall after the National Day holidays, weighing on futures prices," Zeng added.

 

Corn futures settled higher, with the benchmark May 2007 contract at RMB1,400/tonne, up RMB3/tonne.

 

The total trading volume for corn rose to 158,112 lots from 103,532 lots Tuesday.

 

"The market was divided over corn in recent days. Some investors remained on guard for harvest pressure to emerge, while others are more optimistic, expecting steady and strong long-term demand," said Zeng.

 

"Futures prices may fall in November and December due to the new harvest and rebound early next year." he added.