October 16, 2006

 

Monday: China soybean futures settle higher on CBOT gains

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly higher Monday, tracking gains in Chicago Board of Trade soybean futures Friday.

 

The benchmark January 2007 contract gained RMB19 to settle at RMB2,572 a metric tonne, after trading between RMB2,555/tonne and RMB2,583/tonne.

 

Total trading volume rose to 58,800 lots from 29,896 lots Friday. One lot is equivalent to 10 tonnes.

 

"Soybean futures prices rose today, supported by CBOT gains Friday. Whether the gains will last this week will mainly depend on the CBOT performance," said Zhang Yifan, a trader at China Grains & Oils Group Feed Corp.

 

Gao Yanrong, an analyst at Dalu Futures Co., is more positive, saying, "both prices and trading volume jumped today, showing a recovery in market confidence."

 

"A bullish market is bound to come, unless there is new large outbreaks of bird flu," Gao added.

 

Soymeal futures settled higher on fresh buying, according to analysts.

 

The benchmark January 2007 soymeal contract rose RMB26 to settle at RMB2,283/tonne, after trading between RMB2,258/tonne and RMB2,294/tonne.

 

Total trading volume rose sharply to 257,434 lots from 97,442 lots Friday.

 

"Prices for imported soybeans are expected to increase with CBOT rises, supporting soymeal futures," Zhang said.

 

"Trading became very active with the return of large investors, such as funds, contributing to the bullish sentiment," Gao said.

 

Soyoil futures settled up as well, thanks to a spillover effect from other grain futures, analysts said.

 

The most widely held January 2007 soyoil contract settled RMB19 higher at RMB5,606/tonne.

 

Corn futures settled higher. The benchmark May 2007 contract rose RMB8 to settle at RMB1,484/tonne, after trading between RMB1,477/tonne and RMB1,493/tonne.

 

Total trading volume for corn fell to 608,596 lots from Friday's 636,116 lots.

 

"Besides the CBOT gains, rises in corn futures were also fueled by industrial demand, which is supposed to soar over the next couple of years," said Gao.

 

However, "futures will find resistance at the current price level, as fundamentals will not change over the short term," said Zhang.