March 8, 2006

 

Wednesday: China soybean futures settle lower on CBOT; corn down

 

 

Soybean futures on China's Dalian Commodity Exchange settled mostly lower Wednesday, tracking overnight losses in soybean futures on the Chicago Board of Trade, said analysts.

 

The benchmark September 2006 soybean contract settled RMB27 lower at RMB2,704 a metric tonne.

 

Trading volume for all soybean contracts rose to 101,208 lots from 88,530 lots Tuesday. One lot equals 10 tonnes.

 

The benchmark opened lower on CBOT and traded in a narrow range before short covering at the end of the session pushed up the price a little.

 

Shorts thought prices had strong support at RMB2,700/tonne, and so it was a good opportunity to exit, said a Zhejiang-based trader.

 

Whether support at $5.80 a bushel for CBOT May soybeans will be breached after Thursday's USDA report comes out will provide clues for the local market on whether it is really the technical bottom, said Tang Yi, an analyst with Capital Futures Co.

 

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

 

The benchmark September contract settled RMB25 lower at RMB2,611/tonne.

 

Soymeal and soyoil futures settled lower along with soybean futures.

 

The benchmark September 2006 soymeal contract fell RMB32 to settle at RMB2,316/tonne.

 

The benchmark September 2006 soyoil contract settled RMB38 lower at RMB5,214/tonne.

 

Corn futures settled slightly lower on long liquidation on concerns over bird flu, analysts said.

 

The benchmark September 2006 contract settled RMB17 lower to RMB1,439/tonne, after trading between RMB1,430 and RMB1,453/tonne.

 

Open interest for all contracts fell by 72,866 lots to 729,132 lots.

 

China reported Wednesday its 10th human death from bird flu - a nine-year-old girl in the country's southeast. But the government said the cause of her infection was still being investigated.

 

Bird flu has become a threat to corn futures prices, as corn is still mainly used to produce feed for animals.

 

"Technical support is at RMB1,400-RMB1,420/tonne now, but if more (bird flu) cases are reported, it's hard to say," Tang said.