December 30, 2005

 

Friday: China soybean futures settle lower on CBOT losses

 

 

Soybean futures on China's Dalian Commodity Exchange settled lower Friday on overnight CBOT losses.

 

The benchmark May 2006 soybean contract settled RMB34 lower at RMB2,686 a metric tonne after trading between RMB2,677 and RMB2,693/tonne.

 

The total trading volume for soybean futures on the exchange rose to 234,132 lots from 197,864 lots Thursday. One lot is equivalent to 10 tonnes.

 

The benchmark price opened lower and remained steady throughout the day, with trading volume gradually declining.

 

"CBOT's overnight decline to 1 1/2-week lows was the main reason (for the lower opening), although the market itself is in a downward correction," said Ding Haijiang, an analyst with South China Futures.

 

Ding added that news of a new human fatality from bird flu weighed on the market.

 

Soymeal futures also settled lower, with the benchmark May 2006 contract settling down RMB40 at RMB2,320/tonne after trading between RMB2,309 and RMB2,329/tonne.

 

Meanwhile, the total trading volume for soymeal futures fell to 384,254 lots from 505,726 lots Thursday.

 

Traders said the downward correction may continue after the market reopens Wednesday, in view of the previous gains, but it's still difficult to predict the major trend after mid-January.

 

"It depends on what kind of fundamentals or other types of market stimulation we'll have then," Ding said.

 

Looking ahead to 2006, Ding said grain futures are likely to attract more market participants if some speculators retreat from overbought metals and fuel oil futures in the local market, because grains remained "quiet" this year.

 

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 RMB38 lower at RMB2,679/tonne, after trading between RMB2,666 and RMB2,686/tonne.

 

Corn futures traded on the exchange also settled lower.

 

The most widely held September 2006 contract settled down RMB16 at RMB1,368/tonne, after trading between RMB1,359 and RMB1,376/tonne.