December 11, 2006

 

Monday: China soybean futures mostly up; corn up on indus demand

 

 

Soybean futures traded on the Dalian Commodity Exchange settled mostly higher Monday on spillover effect from strong gains in corn futures, analysts said.

 

The benchmark May 2007 contract rose RMB8 to settle at RMB2,833 a metric tonne, after trading between RMB2,817/tonne and RMB2,843/tonne.

 

Total trading volume was 59,840 lots versus 55,100 lots Friday.

 

One lot is equivalent to 10 tonnes.

 

The benchmark opened lower in the morning session on Friday's losses in soybean futures on the Chicago Board of Trade, but bullish sentiment toward corn prompted some buying in soybean, analysts said.

 

"Some market participants speculate that high corn prices will result in a smaller acreage of soybean, hence supporting prices next year," said Yu Junli, an analyst at Green Futures Co.

 

"For the near term, if corn remains bullish, soybean will also benefit," Yu said.

 

Also, if corn futures continue their uptrend, increased use of soymeal in animal feed and less use of corn can be expected, which could underpin soybean and soymeal futures prices, said Gao Yanrong, an analyst at Dalu Futures Co.

 

Soymeal futures settled mostly a tad lower on weak feed demand, and in line with Friday's CBOT losses, analysts said.

 

The benchmark May 2007 soymeal contract gained RMB3 to settle at RMB2,323/tonne, after trading between RMB2,313/tonne and RMB2,332/tonne.

 

Dalian's soyoil futures settled higher as buying by consumers remained strong, analysts said.

 

The benchmark May 2007 soyoil contract rose RMB38 to settle at RMB6,604/tonne.

 

Corn futures settled higher on fresh buying after industrial processors in China's northeast, the main production base, raised their purchase prices to feed rising appetite, analysts said.

 

"They're rushing to buy... I'm very optimistic about the price outlook," Yu said.

 

The most active September 2007 contract settled RMB16 higher at RMB1,684/tonne, after trading between RMB1,665/tonne and RMB1,694/tonne.

 

Trading volume for all corn contracts rose to 952,324 lots from 745,050 lots Friday.

 

"Higher cash values, supported by the strong demand of industrial processors, will probably continue to underpin futures prices in the near term," said Zhang Yifan, a trader at China Grains & Oils Group Feed Corp.