October 11, 2006

 

Wednesday: China soybean futures settle down on CBOT losses; corn mixed

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled lower Wednesday, in tandem with the overnight correction in Chicago Board of Trade soybean futures.

 

The benchmark January 2007 contract fell RMB15 to settle at RMB2,535 a metric tonne, after trading between RMB2,531/tonne and RMB2,540/tonne.

 

Total trading volume fell to 15,218 lots from 29,624 lots Tuesday.

 

One lot is equivalent to 10 tonnes.

 

Although CBOT soybean futures suffered double-digit losses overnight, local soybean futures didn't fall that much as "we didn't gain as much as they did in the previous session," Great Wall Futures Co. analyst Liu Xinghua said. Analysts said domestic feed demand is fairly strong at the moment due to the depletion of inventories before the National Day holiday, but the ongoing harvest and large amount of imports ensure ample supply.

 

"Speculators aren't eager to catch up with CBOT gains or losses and are reluctant to build fresh positions at the moment as market direction is still unclear," Liu said.

 

Dalian's No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, weren't traded Wednesday.

 

Soymeal and soyoil futures settled down, along with soybean, on a correction following solid gains Tuesday.

 

The benchmark January 2007 soymeal contract fell RMB15 to settle at RMB2,227/tonne, after trading between RMB2,222/tonne and RMB2,232/tonne.

 

The most widely-held January 2007 soyoil contract lost RMB34 to settle at RMB5,531/tonne.

 

Corn futures settled mixed as relatively stable cash prices partly offset losses in overnight CBOT corn futures, analysts said.

 

The ongoing harvest pushed prices in China's central provinces lower, while those in the producing regions in the northeast and the major consumer provinces in the south were largely unchanged, traders said.

 

"The higher cash prices compared with the same time last year have been supporting futures prices," a trader with a brokerage based in Beijing said.

 

Even though cash values will probably fall further in coming weeks because of the harvest, "we're optimistic about the demand from the processors for industrial use," he said.

 

The benchmark May 2007 contract settled RMB1 lower at RMB1,444/tonne, after trading between RMB1,436/tonne and RMB1,450/tonne.

 

Total trading volume for corn fell to 448,070 lots from 665,496 lots Tuesday.