February 27, 2006

 

China soybean prices little changed in thin trade

 

 

Soybean prices in China's major soybean-producing regions were little changed in the week, while trading remained thin, as crushers expect prices to fall soon, analysts said.

 

In Harbin, the capital city of Heilongjiang province--China's largest soybean-producing region--prices of average quality soybeans were around RMB2,560 a  tonne, unchanged from the previous week.

 

Prices were at RMB2,580/tonne in Changchun, the capital city of Jilin province, another major soybean-producing region.

 

Analysts said farmers are still holding about half of the total output, and as they have to prepare for spring seeding in March, crushers' anticipation of a large increase in supply prevented them from buying much in the week.

 

"They are just waiting for bargains," said Wang Zhengang, an analyst with China National Grain and Oils Information Centre.

 

Wang said bearish sentiment on the CBOT enhanced the crushers' expectation of lower prices in the foreseeable future.

 

Meanwhile, shrinking demand for soymeal resulting from concerns over bird flu has largely narrowed local crushers' profits, if any.

 

"To grow corn or soybeans will be a question for farmers in north-east China when March arrives," given the bullish corn and bearish soybean prices, Wang added.

 

COFCO Futures said 930,000 tonnes of soybeans arrived in China from Feb 1-20 and revised its estimate of total arrivals to 1.3 million tonnes for February, down from the previous 1.5 million to 1.6 million tonnes.

 

China National Cereals, Oils and Foodstuffs Corp, a major grains trading company, holds a controlling stake in COFCO Futures Co.