December 22, 2006

 

Friday: China soybean futures settle mostly up on CBOT gains

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Friday, following overnight gains on the Chicago Board of Trade, analysts said.

 

The benchmark May 2007 contract settled RMB8 higher at RMB2,840 a metric tonne, after trading between RMB2,829 and RMB2,855/tonne.

 

Total trading volume fell to 59,436 lots from 72,700 lots Thursday. One lot is equivalent to 10 tonnes.

 

"Gains on CBOT and e-CBOT supported today's rises in soybean futures," said Liu Xinghua, an analyst at Great Wall Futures Co.

 

But "gains were narrowed in the late session on long liquidation amid cautious market sentiment before the holidays," Liu added

 

Soymeal futures settled up. The benchmark May 2007 soymeal contract rose RMB4 to settle at RMB2,308/tonne, after trading between RMB2,297 and RMB2,321/tonne.

 

Total trading volume fell to 132,802 lots from 156,994 lots Thursday.

 

"Demand for soymeal is expected to rise early next year, with prices of pork and poultry seen picking up at a pretty fast pace recently," said Liu.

 

Weakening soyoil prices also offered support to soymeal futures, analysts said.

 

"The overstocking of soymeal is easing as crushing companies cut production lately, mainly due to recent falls in soyoil prices," said Xu Wenjie, an analyst at Tianma Futures Co

 

Soyoil futures settled mostly up. The benchmark May 2007 soyoil contract rose RMB17 to settle at RMB6,683/tonne.

 

Corn futures settled mostly higher. The benchmark May 2007 contract settled RMB17 up at RMB1,643/tonne, after trading between RMB1,634 and RMB1,657/tonne.

 

Total trading volume for corn rose to 1,631,050 lots from 1,072,612 lots Thursday.

 

"Strong long buying interest contributed to today's rise in corn futures and a jump in trading volume," Liu said.

 

"Despite recent tightening measures by the government, market sentiment was still bullish, as corn's fundamentals remain sound from a long-term point of view," Xu added.

 

The Chinese government has suspended approval of ethanol projects, which use corn as a feedstock, in a bid to ensure the country's grain supplies, local media reported earlier.