November 29, 2005

 

Tuesday: China soybean futures settle mostly down; corn up slightly

 

 

China's Dalian Commodity Exchange soybean futures settled mostly lower Tuesday, extending a downtrend for the past four trading days on worries over bird flu.

 

The benchmark May 2006 soybean contract fell RMB13 to settle at RMB2,524 a metric tonne, after trading between RMB2,509 and RMB2,550/tonne.

 

But selling on the benchmark moderated after a sharp fall Monday caused by active long liquidation.

 

With the market hovering around lows not seen since early this year, light short covering as well as some bargain hunting also emerged, some analysts said.

 

However, chances of a rebound are small, given a lack of supportive news, they said.

 

Total trading volume for soybean futures decreased to 419,296 lots from 463,236 lots Monday. One lot is equivalent to 10 tonnes.

 

Late Monday, the Ministry of Agriculture said on its Web site that two new bird flu outbreaks had been confirmed in the northeastern Xinjiang autonneomous region and southern Hunan province, respectively, bringing the total number of reported outbreaks since October to 25.

 

The disease has undermined demand for poultry and eggs and in turn reduced feed demand.

 

Soymeal, an end product of soybeans, is an important raw material for producing feed.

 

Dalian's No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops but are seldom traded, settled mixed.

 

The No. 2 May 2006 soybean contract gave up RMB7 to settle at RMB2,520/tonne, after trading between RMB2,512 and RMB2,538/tonne.

 

Soymeal futures traded on the exchange settled mostly lower, with light short covering surfacing in the final minutes of trading.

 

The benchmark May 2006 soymeal contract lost RMB23 to settle at RMB2,137/tonne, after reaching a new nine-month low of RMB2,117/tonne. Its intraday high was RMB2,159/tonne.

 

Corn futures traded on the exchange settled marginally higher on some bargain-hunting after recent declines.

 

The most heavily traded September 2006 contract settled RMB2 lower at RMB1,275/tonne, after trading between RMB1,271 and RMB1,279/tonne.