December 16, 2005

 

Friday: China soybean futures settle higher; record soymeal trades

 

 

Soybean futures on China's Dalian Commodity Exchange settled higher on fresh speculative buying Friday, analysts said.

 

The benchmark May 2006 soybean contract settled RMB16 higher at RMB2,678 a metric tonne after trading between RMB2,654/tonne and RMB2,696/tonne.

 

The benchmark opened lower after Chicago Board of Trade soybeans ended weaker overnight.

 

But it quickly moved into positive territory in the first 30 minutes of trading on active speculative buying.

 

Buying was consistent throughout the day, mostly led by trading in soymeals, although some selling emerged in the final minutes of the session.

 

"It's a technical rebound today, in view of Thursday's drop," said Yu Junli, chief analyst with Green Futures.

 

"(But) given today's buying momentum, the local market is expected to extend the rebound next week," said a Heilongjiang-based analyst.

 

The total trading volume for soybean futures on the Dalian exchange rose to 347,010 lots from 274,918 lots Thursday. One lot is equivalent to 10 tonnes.

 

Soymeal futures also ended higher, with trading in the benchmark May 2006 soymeal futures contract surging to a record high of 887,426 lots due to rampant speculative trading.

 

However, several analysts said moderate selling occurred, as some players deemed the rebound to be short-lived due to a lack of fundamental support.

 

"I'm not optimistic about the soybean and soymeal market because demand will quickly go down, along with the decrease of poultry population at the end of the year when poultry is slaughtered for the upcoming Lunar New Year holidays," Green Futures' Yu said.

 

The May 2006 soymeal contract settled RMB24 higher at RMB2,309/tonne after trading between RMB2,271/tonne and RMB2,343/tonne.

 

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.

 

However, the most heavily traded No. 2 September 2006 soybean contract settled flat at RMB2,628/tonne, after trading between RMB2,614/tonne and RMB2,665/tonne.

 

Corn futures traded on the exchange settled higher, mostly in line with soy market.

 

The most widely held September 2006 contract rose RMB4 to settle at RMB1,328/tonne, after trading between RMB1,323/tonne and RMB1,333/tonne.