November 21, 2005

 

Monday: China soybean futures settle down on CBOT; bird flu worries

 

 

China's Dalian Commodity Exchange soybean futures settled lower for a fifth consecutive trading day Monday, following Friday's losses in Chicago Board of Trade soybeans and renewed worries over bird flu.

 

The benchmark May 2006 soybean contract gave up RMB25 to settle at RMB2,657/tonne after hitting RMB2,648/tonne, its lowest level in more than eight months. Its intraday high was at RMB2,667/tonne.

 

Total trading volume for soybean futures fell to 272,036 lots from 371,782 lots Friday. One lot is equivalent to 10 tonnes.

 

CBOT soybeans settled lower Friday on bearish fundamental developments and selling that emerged when technical supports were breached, with benchmark January soybeans ending 9 1/2 cents lower at $5.69 3/4 a bushel.

 

China reported four new outbreaks of bird flu over the weekend, bringing the total number of reported outbreaks nationwide to 17 since Oct. 19.

 

Chinese officials warned Monday that the bird flu threat to humans was growing as the winter flu months are approaching, and ordered officials to stockpile emergency supplies and respond more quickly to outbreaks in poultry.

 

"Bird flu concerns can't be expelled quickly," said an analyst. "The local market will be under pressure even if Chicago Board of Trade soybeans advance."

 

Crushers in many regions were said to have raised their soyoil prices recently, as they want to offset lower soymeal prices due to poor demand caused by bird flu worries.

 

Soymeal, a byproduct of crushed soybeans, is mostly used to make feed products. Soyoil, the other commodity that comes from crushing soybeans, is for human consumption.

 

The No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled mostly lower.

 

The most actively traded No. 2 May 2006 soybean contract lost RMB29 to settle at RMB2,643/tonne, after trading between RMB2,625 and RMB2,670/tonne.

 

Dalian's soymeal futures settled lower, tracking losses in the cash soymeal market due to bird flu concerns.

 

The benchmark May 2006 soymeal contract fell RMB22 to settle at RMB2,272/tonne, after hitting its lowest level in more than eight months at RMB2,264/tonne. Its intraday high was at RMB2,282/tonne.

 

Corn futures traded on the exchange settled mostly lower, in line with soy futures.

 

The most heavily traded September 2006 contract settled RMB6 lower at RMB1,272/tonne, after trading between RMB1,268 and RMB1,280/tonne.