China looks to South America for cheaper soy

Soy traders in China are looking to cheaper March to May shipments from South America as they conclude heavy orders for near-month cargoes from the US.

Some buyers believe expected good harvests in Brazil and Argentina, the two major soy exporters outside the US, could lead to a big slide for Chicago Board of Trade soy prices, the China National Grain and Oils Information Centre (CNGOIC) reported.

China has booked 19.76 million tonnes of US soy so far in the 2009-10 marketing year to take advantage of a record US harvest and strong crushing margins. The volume rose 73% from the same period a year earlier.

China's soyoil market stayed strong after prices rebounded to high levels in early December but trading volumes were low. The centre said demand would likely pick up in the coming weeks as buyers are expected to stock up their inventories ahead of the Chinese New Year.

Meanwhile, the soymeal market in China remained weak following the large arrivals of soy imports. Merchants and feed mills now plan to wait for meal prices to fall before they make major orders, traders said.