December 7, 2005

 

Wednesday: China soybean futures settle mostly down on CBOT; corn flat

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled mostly lower Wednesday, tracking an overnight fall in Chicago Board of Trade soybeans.

 

The benchmark May 2006 soybean contract lost RMB21 to settle at RMB2,555 a metric tonne, after trading between RMB2,545/tonne and RMB2,566/tonne.

 

The benchmark opened lower, in line with the overnight loss in CBOT soybeans, although some speculative long buying in the morning session helped to limit losses.

 

This didn't last long, however, with buying interest drying up before the morning session ended, as speculators didn't see any reason to bid up prices and push contracts into positive territory.

 

Analysts said the local market remains consolidated around recent low levels, with traders awaiting more leads.

 

"The market may rebound in the near term, but an upside trend has yet to be established due to a scarcity of leads," an analyst said.

 

Meantime, a new human case of bird flu was confirmed in China Tuesday, bringing the total number of confirmed human cases in the country to four since October. Two have died from the disease.

 

The country hasn't reported any outbreak of bird flu among fowl since Thursday, although there have been 25 reported outbreaks across the country since October.

 

The disease has dragged down local soy and corn futures for more than a month.

 

The bird flu virus kills fowl and in turn undermines feed demand. Both soymeal and corn are mostly used to make feed.

 

The total trading volume for soybean futures on the Dalian exchange fell to 239,392 lots from 305,582 lots Tuesday.

 

One lot is equivalent to 10 tonnes.

 

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

 

The No. 2 May 2006 soybean contract settled RMB17 lower at RMB2,519/tonne, after trading between RMB2,515/tonne and RMB2,525/tonne.

 

Soymeal futures traded on the exchange also settled mostly lower, with the benchmark May 2006 soymeal contract losing RMB24 to settle at RMB2,163/tonne after trading between RMB2,153/tonne and RMB2,172/tonne.

 

Corn futures traded on the exchange settled mostly flat, as buying subsided from speculators who had been driving up prices for the past week or so.

 

The most heavily traded September 2006 contract edged up RMB1 to settle at RMB1,312/tonne, after trading between RMB1,305/tonne and RMB1,319/tonne.