January 29, 2004

China Soybean Futures At Limit Lows

Concerns over bird flu sent most soybean and soymeal futures contracts traded on China's Dalian Commodity Exchange to their 3% limit-lows as soon as the market resumed trading Thursday after a long holiday.

China's commodities markets were closed for the Lunar New Year holiday Jan. 19-28.

At 0148 GMT, seven of nine soybean contracts and three of six soymeal contracts dropped by 3%, the maximum loss contracts are allowed to post on a single day.

At 0200 GMT, the benchmark May 2004 soybean contract fell to 3,339 yuan a metric ton ($1=CNY8.28), down CNY103/ton, or 3%, from its last settlement Jan. 16.

The benchmark May 2004 soymeal contract fell to CNY2,785/ton, down CNY86/ton, or 3%, from Jan. 16.

Traders said the confirmed bird flu cases in the southwestern province of Guangxi and some suspected cases in other Chinese provinces led local players to speculate soybean and soymeal consumption will fall if local residents avoid eating poultry.