December 28, 2005
Wednesday: China soybean futures settle lower on long liquidation
Soybean futures on China's Dalian Commodity Exchange settled lower Wednesday on long liquidation, as well as short covering of the January contract, traders said.
The benchmark May 2006 soybean contract settled RMB36 lower at RMB2,724 a metric tonne after trading between RMB2,703/tonne and RMB2,745/tonne.
The total trading volume dropped to 340,484 lots from 456,072 lots Tuesday.
One lot is equivalent to 10 tonnes.
"Long liquidation and short covering were both seen in the market," said Xu Lixin, an analyst with Jingyi Futures Co.
Long buyers were taking profit after the market started rallying end-November, while shorts rolled from their January contracts into February, he said.
The absence of fresh fundamental news will continue to keep technical factors in play and the influence from Chicago Board of Trade soybean futures will be minimal, traders said.
"In view of support at RMB2,700 and resistance at RMB2,780, a consolidation in the following days can be predicted," said a trader with China International Futures Co.
Losses will likely be limited, however, as long as there aren't any sharp movements on CBOT, he said.
Most soymeal futures settled lower and the benchmark May 2006 contract settled RMB34 lower at RMB2,364/tonne after trading between RMB2,332/tonne and RMB2,383/tonne.
The total trading volume of soymeal futures fell to 862,954 lots from 1,085,206 lots yesterday.
Most of Dalian's No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled lower.
The most heavily traded September 2006 No. 2 soybean contract settled RMB41 lower at RMB2,715/tonne, after trading between RMB2,686/tonne and RMB2,730/tonne.
Corn futures traded on the exchange also settled mostly lower.
The most widely held September 2006 contract dropped RMB3 to settle at RMB1,381/tonne after trading between RMB1,376/tonne and RMB1,387/tonne.
