December 14, 2005

 

Wednesday: China soybean futures settle higher on CBOT; corn up

 

 

Soybean futures on China's Dalian Commodity Exchange settled higher for a fourth consecutive trading day Wednesday, boosted by overnight gains in Chicago Board of Trade soybean futures.

 

The benchmark May 2006 soybean contract settled RMB35 higher at RMB2,678 a metric tonne, after trading between RMB2,663/tonne and RMB2,694/tonne.

 

The benchmark opened sharply higher after CBOT soybean futures surged overnight on speculative buying.

 

However, its gains were steadily pared by bouts of short selling in the first hour of trading and long liquidation in the afternoon.

 

"The rise (in the local market) was mainly due to gains in CBOT soybeans and the fact that there have been no reports of bird flu outbreaks recently," said Ding Haijiang, an analyst with Zhejiang Nanhua Futures.

 

Ding pegged resistance at RMB2,750/tonne for the benchmark and expects consolidations around that level in the near term. He didn't provide a support level.

 

The upside for soybeans in the local bourse may be limited as the benchmark CBOT January contract is expected to face strong technical and psychological resistance at $6.00 a bushel, according to Tianma Futures' analyst Shi Junfeng.

 

"More consolidation in the local market is likely if the benchmark CBOT stays in a range of $5.50-$6.00/bu," Shi added.

 

Dalian's soybean futures usually track CBOT soybean futures.

 

The total trading volume for soybean futures on the Dalian exchange rose to 438,238 lots from 381,586 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 higher.

 

The most heavily traded No. 2 September 2006 soybean contract settled RMB38 higher at RMB2,650/tonne, after trading between RMB2,640/tonne and RMB2,657/tonne.

 

Soymeal futures traded on the exchange settled sharply higher in active trading, mostly in line with soybeans.

 

The benchmark May 2006 soymeal contract gained RMB46 to settle at RMB2,314/tonne, after trading between RMB2,300/tonne and RMB2,336/tonne.

 

Corn futures traded on the exchange settled mildly higher, with the most widely held September 2006 contract inching up RMB1 to settle at RMB1,331/tonne, after trading between RMB1,322/tonne and RMB1,338/tonne.