China shows high buying interest for cheap South American soy

Chinese crushers were active buyers for cheap South American soy, attracted by lower Chicago Board of Trade soy prices, while their soymeal inventories are on the rise due to large imports.

 

Soy cargoes from Brazil and Argentina, the world's second and third largest exporters, were quoted at RMB3,500 (US$512.7) per tonne for May and June shipment.

 

The price advantage -- 8.6% lower than domestic soy, would spur more imports, said the China National Grain and Oils Information Centre (CNGOIC).

 

However, soymeal inventories held by crushers were increasing because of a reduction of sales contracts signed for late this month and early February, it said in a weekly survey.

 

Domestic soymeal and soyoil prices kept falling last week, but inventory build-up by merchants ahead of the Chinese New Year holidays could spur demand, according to the centre's survey.

 

The corn market stayed strong, supported by corn processors' purchases, but farmers have not increased supplies. Processors were paying higher prices to try to source enough for inventory build-up ahead of holidays.