August 7, 2006

 

Monday: China soybean futures settle lower on US weather outlook

 

 

Soybean futures traded on China's Dalian Commodity Exchange settled lower Monday, as weather forecasts gave no firm indication of whether a drought may hit major soybean-producing regions in the U.S.

 

The benchmark September contract settled RMB8 lower at RMB2,408/tonne, after trading between RMB2,401/tonne and RMB2,415/tonne.

 

Total trading volume fell to 61,222 lots from 62,482 lots Friday. One lot is equivalent to 10 tonnes.

 

"Soybean futures prices dropped, pressured by market concerns that the U.S. weather may change for the better," said Li Honglei, an analyst at Nanhua Futures Co.

 

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

 

The benchmark September contract settled at RMB2,459/tonne, up RMB9.

 

Soymeal futures settled mostly lower. The most active January 2007 soymeal contract fell RMB11 to settle at RMB2,273/tonne, after trading between RMB2,266/tonne and RMB2,281/tonne.

 

Total trading volume for all soymeal contracts rose to 196,988 lots from 347,622 lots Friday.

 

"Soymeal futures fell in line with soybean futures. The retreat was relatively moderate because demand for soymeal showed signs of recovery with prices for poultry and eggs picking up," Li said.

 

Soyoil futures settled mostly down, although the benchmark November 2006 soyoil contract rose RMB6 to settle at RMB5,563/tonne.

 

"Demand for soyoil remains stable and starts to pick up a little bit, lending support to soyoil futures prices," Li added.

 

Corn futures settled mostly lower. The most widely held May 2007 contract settled at RMB1,399/tonne, down RMB6.

 

"A strong rebound in corn futures prices is not expected in the near future as oversupply is still serious," Li said.

 

Total trading volume for corn rose to 304,520 lots from 269,740 lots Friday.