November 3, 2006

 

Friday: China soybean futures down, market expects CBOT loss; corn up

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Friday, as local market participants expected Chicago Board of Trade soybean futures to fall on charts tonneight.

 

"Earlier gains in CBOT Thursday were trimmed later in the session, and we expect the retreat to continue Friday," said an analyst based in Beijing.

 

The benchmark May 2007 contract settled RMB21 lower to RMB2,820 a metric tonne, after trading between RMB2,808/tonne and RMB2,832/tonne.

 

Total trading volume was at 86,788 lots versus 159,700 lots Thursday.

 

One lot is equivalent to 10 tonnes.

 

"It's a typical pre-weekend sentiment...Cautious speculators waited on the sidelines," said Zhang Yifan, a trader at China Grains & Oils Group Feed Co.

 

"Consolidation likely continue in short term, given the supply and demand situation," said Zhang.

 

Soymeal and soyoil fell along with soybean futures.

 

The benchmark May 2007 soymeal contract fell RMB18 to settle at RMB2,411/tonne, after trading between RMB2,399/tonne and RMB2,423/tonne.

 

The benchmark May 2007 soyoil contract gave up RMB17 to settle at RMB6,258/tonne.

 

Corn futures settled slightly higher on fresh buying, in tandem with overnight gains in CBOT.

 

The benchmark May 2007 contract gained RMB5 to settle at RMB1,493/tonne, after trading between RMB1,484/tonne and RMB1,501/tonne.

 

Total trading volume for corn at 804,506 lots, versus 442,350 lots Thursday.

 

Open interest for all corn contracts rose 79,874 lots to 1.05 million lots, hitting a record high.

 

"Market opinions now diverge on the outlook of corn, as prices of newly harvest corn in northeastern China are not yet settled," said an analyst in Shanghai.

 

"However, bullish sentiment in CBOT more or less sends positive signal to local market in the meantime (as some think China will import corn sooner or later some time next year)," she added.