December 5, 2006

 

Tuesday: China soybean futures settle lower on CBOT losses

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Tuesday, pressured by overnight losses in soybean futures on the Chicago Board of Trade, analysts said.

 

The benchmark May 2007 contract settled RMB30 lower at RMB2,824 a metric tonne, after trading between RMB2,812 and RMB2,830/tonne.

 

Total trading volume declined to 91,380 lots from 145,092 lots Monday. One lot is equivalent to 10 tonnes.

 

"Monday's falls in (soybean) futures were extended to today on CBOT losses," said Li Honglei, an analyst at Nanhua Futures Co.

 

"Investors continued to liquidate positions, with a quiet news front providing no supportive features," he added.

 

Soymeal futures settled lower, in step with soybean futures. The benchmark May 2007 soymeal contract fell RMB34 to settle at RMB2,310/tonne, after trading between RMB2,298 and RMB2,319/tonne.

 

Total trading volume fell to 125,192 lots from 172,298 lots Monday.

 

"In addition to the CBOT losses, sluggish demand also weighed on soymeal futures," Li said.

 

However, "further large losses are unlikely, as futures have fallen to below prices in the spot market," said Dong Liang, an analyst at Shanghai Jiuheng Futures Co.

 

Soyoil futures settled mostly down. The benchmark May 2007 soyoil contract fell RMB56 to settle at RMB6,628/tonne.

 

Corn futures settled lower. The benchmark May 2007 contract settled RMB16 lower at RMB1,558/tonne, after trading between RMB1,552 and RMB1,571/tonne.

 

Total trading volume for corn declined to 960,652 lots from 1,104,486 lots Monday.

 

"Corn futures continued to fall today on long liquidation, as speculators pulled out of corn futures, concerned about further downward corrections," Li said.

 

However, "losses were narrowed in the late session on short covering, indicating room for further losses is limited," said Dong.