November 24, 2005

 

Thursday: China soybean futures settle down on CBOT, bird flu worries

 

 

China's Dalian Commodity Exchange soybean futures settled lower Thursday, falling to levels not seen since February, as fresh speculative selling emerged after Chicago Board of Trade soybeans tumbled overnight.

 

The benchmark May 2006 soybean contract fell RMB33 to settle at RMB2,618 a metric tonne, after reaching a multi-month low of RMB2,611/tonne. Its intraday high was at RMB2,625/tonne.

 

Total trading volume for soybean futures rose to 260,856 lots from 249,544 lots Wednesday. One lot is equivalent to 10 tonnes.

 

In addition to overnight losses in CBOT soybeans, reports of a new bird flu outbreak and a second case of human fatality caused by the disease in China put players in a selling mood.

 

Analysts said a bearish trend has been set in the local soybean futures market, with little chance of a meaningful recovery in the short term.

 

Any technical rebound would provide an opportunity for fresh short selling, according to Yuan Bei, an analyst with Dalian Northern Futures.

 

China has reported a total of 25 bird flu outbreaks so far this year, most of which were reported this month and October.

 

The bird flu virus kills fowl, in turn undermining demand for soymeal, corn and soybeans.

 

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

 

The most actively traded No. 2 May 2006 soybean contract lost RMB21 to settle at RMB2,605/tonne, after trading between RMB2,598/tonne and RMB2,622/tonne.

 

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

 

The benchmark May 2006 soymeal contract gave up RMB29 to settle at RMB2,227/tonne, after hitting a low of RMB2,219/tonne, last seen in February. Its intraday high was RMB2,235/tonne.

 

Meanwhile, corn futures traded on the exchange settled mostly lower on moderate profit-taking.

 

The most heavily traded May 2006 contract settled RMB2 lower at RMB1,246/tonne, after trading between RMB1,242/tonne and RMB1,250/tonne.