November 9, 2005

 

Wednesday: China soybean futures settle lower; more bird flu worries

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday, mostly on long liquidation, as concerns over a further spread of bird flu in China intensified, analysts said.

 

China has reported four bird flu outbreaks since October and Agriculture Minister Du Qinglin warned Tuesday that the disease could spread further.

 

Earlier, Du said outbreaks in Inner Mongolia, Anhui and Hunan have been effectively brought under control, but the latest outbreak in Liaoning province has turned out to be difficult to contain.

 

"It's likely that the disease will spread further," Du said in a comment posted on the agriculture ministry's Web site, "this isn't something just to raise the alarm."

 

Du's comment is the main reason for the fall in futures prices, one analyst said.

 

The benchmark May 2006 soybean contract gave up RMB20 to settle at RMB2,723 a metric tonne, after trading from RMB2,708-RMB2,747/tonne.

 

The total trading volume for soybeans rose to 243,152 lots from 140,354 lots Tuesday. One lot is equivalent to 10 tonnes.

 

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 edged up RMB3 to settle at RMB2,714/tonne.

 

Soymeal futures on Dalian settled mostly lower on a mixture of long liquidation and short selling.

 

The benchmark May 2006 soymeal contract lost RMB23 to settle at RMB2,328/tonne after hitting an eight-month intraday low of RMB2,306/tonne. Its intraday high was RMB2,356/tonne.

 

Most of the corn futures traded on the Dalian exchange settled lower on moderate long liquidation.

 

The benchmark May 2006 contract settled RMB3 lower at RMB1,259/tonne, after trading between RMB1,250/tonne and RMB1,267/tonne.

 

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