October 20, 2006

Friday: China soybean futures settle mixed in thin trade; corn up

Soybean futures traded on China's Dalian Commodity Exchange settled mixed Friday, despite gains in Chicago Board of Trade soybean futures.

Crushers' high inventories and looming demand concerns pressured prices, keeping local speculators on the sidelines, analysts said.

The benchmark January 2007 contract fell RMB5 to settle at RMB2,586 a metric tonne, after trading between RMB2,581/tonne and RMB2,594/tonne.

Total trading volume fell to 28,960 lots from 61,446 lots Thursday. One lot is equivalent to 10 tonnes.

"We have the harvest going on, and crushers' inventories remained high," said Zhang Yifan, a trader at China Grains & Oils Group Feed Corp.

Besides, market participants are worried about a possible outbreak of bird flu in winter. If that occurs, demand will again be capped, said an analyst at a Beijing-based brokerage.

Soymeal futures mostly fell along with soybeans. The benchmark January 2007 contract fell RMB9 to settle at RMB2,378/tonne, after trading between RMB2,370/tonne and RMB2,387/tonne.

Soyoil futures settled higher on short-covering, said Zhang. The most widely held January 2007 soyoil contract settled RMB77 higher at RMB5,776/tonne.

Corn futures settled slightly higher on gains in CBOT corn, analysts said.

The benchmark May 2007 contract rose RMB2 to settle at RMB1,468/ton, after trading between RMB1,463/tonne and RMB1,472/tonne.

Total trading volume for corn fell to 226,550 lots from 319,730 lots Thursday.

"Market opinions diverge on the price outlook of corn, with some believing a bigger harvest this year will cap further gains and others thinking that expanding industrial uses can absorb the rising supply," said a trader at a brokerage in Shanghai.