November 4, 2005

 

Friday: China soybean futures settle up on CBOT, bird flu worries

 

 

Soybean futures on the Dalian Commodity Exchange settled higher on moderate speculative buying, thanks to an overnight surge in Chicago Board of Trade soybeans.

 

The benchmark May 2006 soybean contract rose RMB37 to settle at RMB2,802 a metric tonne, after trading between RMB2,785-RMB2,819/tonne.

 

Total trading volume in soybeans also increased to 401,572 lots from 211,894 lots Thursday. One lot is equivalent to 10 tonnes.

 

The local market opened higher after the overnight rise in CBOT soybeans, but part of the gains in the local market were later erased by mild selling on renewed bird flu concerns, analysts said.

 

Thursday, China reported its fourth outbreak of bird flu among fowl since October. Earlier, the country confirmed three other outbreaks in Inner Mongolia, Anhui and Hunan.

 

The latest outbreak killed 8,940 chickens in a village in northeastern Liaoning province and prompted authorities to destroy another 369,900 birds.

 

"As such, the market will likely repeat a pattern seen in October, when local gains either lagged CBOT soybeans or losses were steeper compared with the U.S. market," one analyst said

 

The No. 2 soybean contracts, which are encouraged to be delivered with imported genetically modified crops but are seldom traded, settled mostly higher.

 

The May 2006 No. 2 contract gained RMB28 to settle at RMB2,761/tonne after being untraded Thursday.

 

Dalian soymeal futures settled higher, largely in line with soybeans.

 

However, selling on bird flu worries scaled back most of its intraday gains.

 

The benchmark May 2006 contract gained RMB25 to settle at RMB2,413/tonne, after trading between RMB2,392/tonne and RMB2,435/tonne.

 

Most corn futures on the Dalian exchange settled slightly higher, but profit-taking pared a large portion of intraday gains.

 

The benchmark May 2006 contract settled RMB2 higher at RMB1,275/tonne, after trading between RMB1,265/tonne and RMB1,282/tonne.

 

China's futures trading is off-limits to foreign investors.