October 13, 2006

 

Friday: China soybean, corn futures settle up, tracking CBOT gains

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly up Friday, due to overnight gains in Chicago Board of Trade soybean futures, traders said.

 

The benchmark January 2007 contract gained RMB19 to settle at RMB2,553 a metric tonne, after trading between RMB2,548/tonne and RMB2,560/tonne.

 

Total trading volume rose to 29,896 lots from 9,550 lots Thursday.

 

One lot is equivalent to 10 tonnes.

 

"We followed Thursday's CBOT gains, which were on a spillover effect from strong corn and wheat, so I think the prices are not that well supported," said a trader based in Shanghai.

 

The USDA pegged 2006-07 soybean production at 3.189 billion bushels, up 96 million bushels from September's estimates.

 

With ample supply due to the ongoing harvest, and another 2 million tonnes of arrivals in October, most analysts expect prices to fall in the coming weeks.

 

Soymeal and soyoil futures settled higher on fresh buying, analysts said.

 

The benchmark January 2007 soymeal contract rose RMB29 to settle at RMB2,257/tonne, after trading between RMB2,252/tonne and RMB2,265/tonne.

 

The most widely-held January 2007 soyoil contract settled RMB38 higher RMB5,587/tonne.

 

Corn futures settled higher on fresh buying, in boosted overall market sentiment, thanks to Thursday's USDA report, which revised the 2006-07 corn production lower than its forecast in August, analysts said.

 

However, "the gains also attracted light short selling, as some speculators bet there will be some correction due to the harvest, despite the favorable fundamentals," said Zhang Yifan, a trader at China Grains & Oils Group Feed Corp.

 

The benchmark May 2007 contract rose RMB17 to settle at RMB1,476/tonne, after trading between RMB1,471/tonne and RMB1,483/tonne.

 

Total trading volume for corn rose to 636,116 lots from Thursday's 530,776 lots.