January 17, 2007

 

Wednesday: China soybean futures mostly up on strong demand; corn down

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Wednesday on strong local demand, despite overnight profit-taking at the Chicago Board of Trade, analysts said.

 

The most active September 2007 contract gained RMB11 to settle at RMB3,098 a metric tonne.

 

Total trading volume fell to 90,314 lots versus 148,130 lots Tuesday.

 

One lot is equivalent to 10 tonnes.

 

"The rising trend hasn¡¯t changed despite the fall on CBOT," said Ding Haijiang, an analyst at Nanhua Futures Co.

 

The rising trend is expected to continue in the long run, as more farmers prefer to grow corn due to its higher prices, said Xu Wenjie, an analyst at Tianma Futures Co.

 

Soymeal futures settled mostly higher, tracking soybean futures and catching up with earlier gains in soybean and soyoil futures.

 

The most active September 2007 soymeal contract gained RMB26 to settle at RMB2,601/tonne.

 

However, Xu expects the soymeal contract to fall in the short term as demand for feedmeal will likely fall. Livestock breeders are reluctant to increase their poultry and livestock numbers, because they are concerned that illnesses such as bird flu could wipe out their stocks.

 

Soymeal is used to make animal feed.

 

Soyoil futures settled mostly lower, with the benchmark May 2007 contract falling RMB17 to RMB6,692/tonne.

 

Corn contracts settled lower, with the benchmark September 2007 contract falling RMB11 to RMB1,753/tonne.

 

Trading volume for all corn contracts was 696,708 lots, compared with 1,188,086 lots Tuesday.