March 7, 2006

 

Tuesday: China soybean futures settle slightly higher; corn down

 

 

Most soybean futures on China's Dalian Commodity Exchange settled slightly higher Tuesday on speculative long buying, analysts said.

 

The benchmark September 2006 soybean contract settled RMB7 higher at RMB2,731 a metric tonne.

 

Trading volume for all soybean contracts rose to 88,530 lots from 49,574 lots Monday. One lot equals 10 tonnes.

 

Speculative long buying in the morning session drove prices higher, but liquidation in the afternoon trimmed gains, said Gao Yanrong, an analyst with Dalu Futures Co.

 

"This is an unexpected move. Players might be testing the market," Gao said. "Maybe it's because some speculators were fed up with the quiet market."

 

Gao added that as news on the fundamental front are mostly negative, local soy futures aren't likely to breach range-bound trading.

 

China suspended the supply of live poultry and pet birds to Hong Kong after China confirmed a new human death from bird flu in neighboring Guangdong province over the weekend.

 

The No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, settled mostly higher.

 

The benchmark September contract settled RMB21 higher at RMB2,636/tonne.

 

Soymeal futures settled higher along with soybean futures. The benchmark September 2006 contract rose RMB9 to settle at RMB2,348/tonne.

 

Meanwhile, soyoil futures settled mostly lower, continuing Monday's downward correction.

 

The benchmark September 2006 contract settled RMB7 lower at RMB5,252/tonne.

 

Open interest for all soyoil contracts rose 2,570 lots to 64,300 lots Monday.

 

Corn futures settled slightly lower on overnight losses on CBOT, analysts said.

 

Investors are concerned with a potential shrink in demand for soymeal after the latest report of human death from bird flu, but a sharp fall isn't expected so far, Gao said.

 

Corn is still mainly used to produce feed for animals in China.

 

The benchmark September 2006 contract settled RMB7 lower at RMB1,456/tonne.

 

Open interest for all contracts fell by 20,472 lots to 801,998 lots.