November 14, 2005

 

Monday: China soybean futures settle mostly higher on CBOT gains

 

 

China's Dalian Commodity Exchange soybean futures settled mostly higher Monday, encouraged by Friday's gains in Chicago Board of Trade soybeans.

 

The benchmark May 2006 soybean contract rose RMB15 to settle at RMB2,750 a metric tonne, after trading between RMB2,737 and RMB2,775/tonne.

 

Total trading volume for soybean futures increased to 230,190 lots from 226,788 lots Friday. One lot is equivalent to 10 tonnes.

 

The local benchmark opened close to its intraday high after benchmark CBOT January soybeans rose above a psychological level of $6 a bushel Friday, but gains in the local market were partly erased later on bouts of long liquidation.

 

Analysts said concerns over bird flu outbreaks in China continued to plague the soymeal as well as soybean futures and cash markets.

 

"Bird flu will likely haunt the poultry industry for a while because it's not easily exterminated," said a trader with a Beijing-based futures trading company.

 

"As a result, the local (futures) market is expected to trail gains in overseas futures markets or exceed losses abroad," he said.

 

"It remains to be seen to what degree bird flu may impact China's soybean imports."

 

Soymeal, one of the two products of soybeans, is mainly used as poultry feed.

 

Three of the six No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled higher, with the other three untraded.

 

The benchmark May 2006 contract settled RMB5 higher at RMB2,718/tonne.

 

Dalian's soymeal futures settled mostly higher, in line with soybeans.

 

Active long liquidation was seen on the benchmark May 2006 soymeal contract, which nevertheless gained RMB19 to settle at RMB2,355/tonne after opening at an intraday high of RMB2,378/tonne. Its intraday low was RMB2,342/tonne.

 

Trading in soymeal futures has been more active than in soybeans in recent weeks, as the soymeal market is more directly affected by bird flu outbreaks.

 

Corn futures traded on the exchange settled mostly lower, but the losses were mild amid some speculative buying.

 

The most heavily traded September 2006 contract lost RMB3 to RMB1,291/tonne, after trading between RMB1,285 and RMB1,303/tonne.