December 29, 2005

 

Thursday: China soybean futures settled mixed; holidays thin trade

 

 

Soybean futures on China's Dalian Commodity Exchange settled mixed Thursday in quiet range-bound trading, analysts said.

 

The benchmark May 2006 soybean contract settled RMB4 lower at RMB2,720 a metric tonne after trading between RMB2,708/tonne and RMB2,730/tonne.

 

Total trading volume for soybean futures on the Dalian exchange fell to 197,864 lots from 340,484 lots Wednesday. One lot is equivalent to 10 tonnes.

 

Soymeal futures also settled mixed, with the benchmark May 2006 contract settling RMB4 lower at RMB2,360/tonne after trading between RMB2,347/tonne and RMB2,372/tonne.

 

Total trading volume for soymeal futures fell to 505,726 lots from 862,954 lots Wednesday, compared with Tuesday's record high of 1,085,206 lots.

 

Traders said the holiday mood thinned trading, and this is likely to be the case for Friday as well.

 

"This is a predictable downward correction, given the gains since the end of November," said Su Dongrong, an analyst with South China Futures Co.

 

"In the next three trading days, the correction will continue, but it won't result in big losses," Su added.

 

The absence of fresh fundamental news and thin trading on CBOT also failed to stimulate the local market, which in turn discouraged speculation, resulting in less active trading, traders said.

 

However, Su said that in mid-January, the market is likely to see big changes. It will either follow CBOT's gains due to the entry of index funds, or revert to being sluggish, as fundamentals aren't supportive for high prices.

 

The trading of Dalian's No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, also settled mixed.

 

The most heavily traded September 2006 No. 2 soybean contract settled RMB2 higher at RMB2,717/tonne, after trading between RMB2,707/tonne and RMB2,726/tonne.

 

Corn futures traded on the exchange settled mostly higher.

 

The most widely held September 2006 contract rose RMB3 to settle at RMB1,384/tonne, after trading between RMB1,375/tonne and RMB1,391/tonne.

 

An official with China's Securities Regulatory Commission today confirmed that white sugar futures will be launched on Jan. 6 on the Zhengzhou Commodity Exchange.