December 20, 2005

 

Tuesday: China soybean futures settle higher; soymeal trading eases

 

 

Soybean futures on China's Dalian Commodity Exchange settled higher Tuesday, continuing their recent surge, after Chicago Board of Trade soybeans rallied overnight.

 

The benchmark May 2006 soybean contract settled RMB44 higher at RMB2,748 a metric tonne - the highest settlement price in over a month. It traded in a tight range between RMB2,738/tonne and RMB2,758/tonne.

 

Analysts said that despite the rise, buying momentum has eased, as the local benchmark has been mostly on the rise since early this month, gaining a total of around RMB200/tonne.

 

"Without major supportive news on the fundamentals side, the recent rally is unlikely to be sustained," one analyst said.

 

The total trading volume for soybean futures on the Dalian exchange fell to 368,912 lots from 371,392 lots Monday. One lot is equivalent to 10 tonnes.

 

Soymeal futures settled higher, but trading in the benchmark May 2006 contract subsided after a record of nearly 1 million lots changed hands Monday.

 

Active long liquidation was seen in the final minutes of trading on the contract, which still settled RMB33 higher at RMB2,381/tonne. It traded between RMB2,361/tonne and RMB2,399/tonne.

 

The liquidation indicates long position holders are unsure of a sustained rally in soymeal despite the easing of bird flu among poultry and hopes of rising feed demand in recent weeks, some analysts said.

 

Dalian's No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops but are seldom traded, settled higher.

 

The most heavily traded No. 2 September 2006 soybean contract settled RMB29 higher at RMB2,681/tonne, after trading between RMB2,660/tonne and RMB2,694/tonne.

 

Corn futures traded on the exchange settled mixed, with the most widely held September 2006 contract rising RMB5 to settle at RMB1,347/tonne, after trading between RMB1,340/tonne and RMB1,354/tonne.