December 23, 2005

 

Friday: China soybean futures settle mixed; trading slows

 

 

Soybean futures on China's Dalian Commodity Exchange settled mixed Friday as trading activities slowed.

 

The benchmark May 2006 soybean contract settled at RMB2,755 a tonne, almost unchanged from yesterday, after trading between RMB2,749/tonne and RMB2,764/tonne.

 

The total trading volume for soybean futures on the Dalian exchange dropped to 226,914 lots from 346,882 lots Thursday. One lot is equivalent to 10 tonnes.

 

Some longs have begun to sell after profiting from a week of active trading, traders said.

 

"The increase in the week is already so high that the overnight increase on CBOT didn't work on it any more. It's time for a correction," said Liu Xinghua, an analyst with Great Wall Futures.

 

"Moreover, the market is adopting a wait-and-see attitude, waiting to see the trend of overseas boards after Christmas," Liu said.

 

Soymeal futures settled little changed, amid a drop in trading volume.

 

The benchmark May 2006 soymeal futures contract settled unchanged at RMB2,373/tonne, after trading between

RMB2,364/tonne and RMB2,383/tonne. Trading dropped to 642,118 lots vs 926,210 lots Thursday.

 

Meanwhile, traders' expectations of the market continued to vary.

 

"The market will still rise, after a technical correction, as the market expects a rise on CBOT," said Liu.

 

However, a senior market researcher said fundamentals still don't support a continued rally, as consumer concerns over bird flu persist, preventing a firm increase in demand for poultry.

 

The trading of Dalian's No. 2 soybean contracts, which are encouraged to be delivered with soybeans harvested from genetically modified crops, was boosted by news the government has agreed to have the exchange set up three more delivery warehouses in three coastal cities.

 

The most heavily traded September 2006 No. 2 soybean contract settled RMB56 higher at RMB2,759/tonne, after trading between RMB2,734/tonne and RMB2,768/tonne.

 

The total trading volume of No. 2 soybean contracts increased to 30,118 lots from 24,144 lots Thursday.

Corn futures settled slightly higher.

 

The most widely held September 2006 contract rose RMB7 to settle at RMB1,356/tonne, after trading between RMB1,351/tonne and RMB1,362/tonne.