March 5, 2007

 

China's soybean prices up on CBOT gains

 

 

Soybean prices in China's major soybean-producing regions rose in the week to Friday (Mar 2) amid light trading, supported by gains in soybean futures on the Chicago Board of Trade during the Chinese New Year holiday.

 

In north-eastern Heilongjiang province, China's largest soybean-growing region, prices of average quality soybeans at its two main soybean trading centres were an average of RMB60-100 a tonne higher than pre-holiday levels.

 

Government offices, businesses and financial markets were closed Feb 19-23 for the holiday, and farmers usually take a longer break, often taking a month-long holiday that starts earlier.

 

In Harbin, the provincial capital, prices were quoted around RMB2,800/tonne compared with RMB2,700-2,740/tonne before the holiday.

 

Prices in the north-eastern part of the province were around RMB2,660-2,680/tonne, up from pre-holiday prices of RMB2,600-2,640/tonne.

 

CBOT contracts rose in most of the sessions last week, when Chinese markets were closed.

 

It experienced some corrections this week, but the decline has yet to spill over to the domestic cash market, because trade is light ahead of the 15th day of the Lunar New Year on March 4, when festivities usually start to wind down, said Zhang Liwei, an analyst at the China National Grain & Oils Information Centre.

 

Meanwhile, high soybean import prices also supported domestic prices, he said.

 

However, soybean cash prices face downward pressure in the near term as soybean harvesting in South America is proceeding smoothly, traders said.

 

A large amount of South American soybeans is expected to arrive in China in late April.