October 16, 2007

 

Tuesday: China soybean futures settle up on CBOT rise, sport market; corn up

 

 

Soybean futures traded on the Dalian Commodity Exchange settled up Tuesday on the heels of gains in Chicago Board of Trade soybean futures overnight.

 

The benchmark May 2008 soybean contract rose RMB26 to settle at RMB4,256 a metric tonne, after trading between RMB4,242/tonne and RMB4,269/tonne.

 

Total trading volume fell to 865,204 lots from 1,028,670 lots Monday. One lot is equivalent to 10 tonnes.

 

"Given the expectation of domestic output decline this year, higher CBOT soybean prices mean higher prices of imports, and hence underpin domestically-grown soybean prices," said a trader in Beijing.

 

Strong soybean and soy products spot markets also contributed to the bullish sentiment, analysts said.

 

Soymeal and soyoil futures settled up in line with soybean futures.

 

The benchmark May 2008 soymeal contract settled RMB35 higher at RMB3,251/tonne. The benchmark May 2008 soyoil contract settled RMB62 higher at RMB8,698/tonne.

 

"As the inventory of soymeal is relatively low, and cash values of soyoil continue to grow, we're likely to see further gains in coming sessions," said Gao Yanrong, an analyst with Dalu Futures Co.

 

Corn futures settled higher. The benchmark May 2008 contract rose RMB10 to settle at RMB1,661/tonne.

 

"We've seen speculative buyers entering the market, despite the divergent views on output this year," said Zhang Yifan, a trader with China Grains & Oils Group Feed Corp.

 

China National Grain and Oils Information Center, along with some big domestic agricultural commodities traders, still forecasts higher output this year, while some independent research institutions estimate lower production, because of unfavorable weather conditions.

 

The benchmark corn contract is at a critical technical level, "but if there are continuous speculative money inflows into the market, it faces more upside," Zhang said.