January 23, 2007

 

Tuesday: China soybean futures up on bargain-hunting, corn up

 

 

China's soybean futures traded on the Dalian Commodity Exchange settled higher Tuesday on bargain-hunting after recent falls.

 

The most active September 2007 contract gained RMB31 to settle at RMB3,084 a metric tonne.

 

Total trading volume rose to 81,082 lots versus 58,026 lots Monday.

 

One lot is equivalent to 10 tonnes.

 

Soybean futures had fallen the past two days, but traders expect the market to maintain upward momentum in the long term.

 

"Global soybean-growing areas will be reduced as corn is more popular due to increasing demand for corn-based ethanol," said Xu Wenjie, an analyst at Tianma Futures Co.

 

The lower price of domestic soybeans compared with imported soybeans also provided support for soybean futures, said Li Honglei, an analyst with Nanhua Futures Co.

 

Soymeal futures settled higher, but soyoil futures settled mostly lower.

 

The most active September 2007 soymeal contract rose RMB23 to settle at RMB2,585/tonne.

 

However, the benchmark May 2007 soyoil contract rose RMB3 to RMB6,617/tonne.

 

Farmers may raise new livestock after the Spring Festival, which falls on Feb. 18, increasing expectations for higher demand for soymeal, said Li. Soymeal is used as animal feed.

 

Buyers of soyoil filled their pre-holiday reserves during the recent price surge, and the demand for soyoil fell, dragging down futures prices, analysts said.

 

Corn contracts settled mostly higher.

 

The benchmark September 2007 corn contract rose RMB8 to settle at RMB1,723/tonne.

 

Trading volume for corn contracts totaled 482,766 lots, compared with 643,300 lots Monday.