November 10, 2005

 

Thursday: China soybean futures settle moderately higher; corn down

 

 

Soybean futures traded on the Dalian Commodity Exchange settled moderately higher Thursday, as bouts of speculative buying emerged after prices fell over the past several trading days.

 

The benchmark May 2006 soybean contract gained RMB8 to settle at RMB2,731 a metric tonne, after trading in RMB2,721-RMB2,740/tonne.

 

However, the total trading volume for soybeans fell to 167,960 lots from 243,152 lots Wednesday. One lot is equivalent to 10 tonnes.

 

Analysts said bird flu outbreaks have sent some players in the futures market to the sidelines.

 

Late Wednesday, the Ministry of Agriculture said on its Web site that two new outbreaks of bird flu among chickens have been detected in northeastern Liaoning province.

 

As a result, local governments in Jinzhou city and Fuxin city, both in Liaoning province, have killed 500,000 poultry.

 

China has reported six outbreaks of the disease during the past month.

 

The latest news came a day after Premier Wen Jiabao said China is facing a "very serious situation" in controlling the spread of bird flu in the country.

 

Wen said the danger of bird flu spreading still exists in some regions and the disease has yet to be totally controlled, according to state media reports.

 

On Tuesday, Agriculture Minister Du Qinglin also warned that the disease could spread further.

 

The No. 2 soybean contracts, which are encouraged to be delivered with imported genetically modified crops but are seldom traded, settled mixed, with the May 2006 No. 2 contract untraded.

 

Most soymeal futures on Dalian settled slightly higher as speculators covered their short positions in the late session that were created earlier.

 

The benchmark May 2006 soymeal contract edged up RMB2 to settle at RMB2,330/tonne after trading between RMB2,316/tonne and RMB2,341/tonne.

 

Corn futures traded on the Dalian exchange settled mostly lower, dragged down by a sluggish cash corn market.

 

The benchmark May 2006 contract settled RMB5 lower at RMB1,254/tonne, after trading between RMB1,250/tonne and RMB1,260/tonne.

 

Corn prices in the local spot market have been on the decline in the past several weeks on bird flu concerns, as well as the arrival of new supplies.

 

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