December 5, 2005

 

Monday: China soybean futures settle slightly lower; corn up

 

 

China's Dalian Commodity Exchange soybean futures settled slightly lower in subdued trading Monday, with some analysts expecting a slight rebound in the coming days if there are no reports of new bird flu outbreaks.

 

The benchmark May 2006 soybean contract fell RMB4 to settle at RMB2,542 a metric tonne, after trading between RMB2,530 and RMB2,553/tonne.

 

Total trading volume for soybean futures fell to 174,800 lots from 209,530 lots Friday. One lot is equivalent to 10 tonnes.

 

Analysts said the local market continued to consolidate around recent lows amid a lack of new trading leads.

 

However, "a slight rebound is possible if bird flu shows signs of being contained," said one analyst.

 

The local market had been hit badly by constant reports of bird flu outbreaks since October, with both soybean and soymeal futures contracts falling to lows not seen since February.

 

China hasn't reported any bird flu outbreaks since last Thursday.

 

China has reported 25 outbreaks of bird flu across the country since October, and the government has killed millions of fowl. It has also confirmed three human cases of bird flu, including two fatalities.

 

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

 

The No. 2 May 2006 soybean contract settled RMB8 lower at RMB2,513/tonne, after trading between RMB2,510 and RMB2,525/tonne.

 

Soymeal futures traded on the exchange also settled slightly lower, with the benchmark May 2006 soymeal contract edging down RMB2 to settle at RMB2,162/tonne despite some late-session buying.

 

Corn futures traded on the exchange settled higher, however, sustained by some fresh speculative buying.

 

The most heavily traded September 2006 contract settled RMB3 higher at RMB1,301/tonne, after trading between RMB1,296 and RMB1,313/tonne.