October 25, 2006

 

Wednesday: China soybean futures settle mostly down on correction

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly lower Wednesday on a downward correction, analysts said.

 

The benchmark January 2007 contract fell RMB1 to settle at RMB2,580 a metric tonne, after trading between RMB2,569/tonne and RMB2,590/tonne.

 

Total trading volume fell to 37,664 lots from 41,214 lots Tuesday.

 

One lot is equivalent to 10 tonnes.

 

"Today's falls were a downward correction following gains Tuesday," said Zhang Yifan, a trader at China Grains & Oils Group Feed Corp.

 

"Soybean futures opened high on overnight gains on the Chicago Board of Trade, but fell later as investors were increasingly concerned that soy futures on CBOT may correct downward," said Gao Yanrong, an analyst at Dalu Futures Co.

 

Zhang said he believes soybean futures will rebound, finding support from prices of imported soybean.

 

"Prices of imported soybeans were quoted around RMB2,800/tonne this week, while those for Chinese soybeans were only around RMB2,200-RMB2,800 a tonne," he said.

 

Soymeal futures settled mostly down. The benchmark May 2007 soymeal contract rose RMB2 to settle at RMB2,386/tonne, after trading between RMB2,375/tonne and RMB2,396/tonne.

 

Total trading volume rose to 215,898 lots from 147,692 lots Tuesday.

 

"Further gains are expected as soymeal prices are still at a low level. Moreover, demand for feed was seen recovering lately," Zhang said.

 

Soyoil futures settled mostly higher. The most widely held January 2007 soyoil contract settled RMB19 higher at RMB5,850/tonne.

 

Corn futures settled higher. But the benchmark May 2007 contract settled unchanged at RMB1,476/tonne after trading between RMB1,466/tonne and RMB1,486/tonne.

 

Total trading volume for corn rose to 498,860 lots from Tuesday's 302,526 lots.

 

"The market was divided over corn futures. Some investors were buying, seeing rising demand for corn, while others were worried that corn futures on CBOT will fall after days of rises. The trading volume increased as a result," Zhang said.

 

Gao, however, is bearish on corn futures. "Besides concerns over a possible downward correction on CBOT in the near future, the weight of the new harvest that will appear in the market in November is also surfacing," he said.