China soy prices remain stable on gov't buying support

Soy prices in China's major producing areas remained stable in the week to Friday, while soymeal and soy oil prices slid slightly due to the weakness in CBOT soy futures.

 

Soy prices in Jixian city in Heilongjiang province, a major producer, were around RMB3,300 per tonne, unchanged from a week ago. The prices in Youyi in the same province also remained the same at RMB3,320/tonne from a week ago.

 

Analysts said soy cash prices will continue to be supported by the ongoing 40 million-tonne government buying, where the government purchases the crop at RMB3,700/tonne, about 12-percent higher from the current spot price.

 

"At RMB3,700/tonne, the government buying certainly helps shore up falling prices in an oversupplied market, letting the new crop remain unaffected by the decline in CBOT soy prices," said Xu Wenjie, an analyst with Tianma Futures Co.

 

Soymeal prices were slightly lower, largely due to CBOT soy's poor performance this week.

 

In Zhangjiagang in Jiangsu province, soy meal was around RMB2,830/tonne, up from RMB2,870/tonne a week ago; in Rizhao in Shandong province, the prices were around RMB2,820/ton compared with RMB2,900/tonne a week ago.

 

"Soymeal prices are largely related to CBOT soy as soymeal is made from imported soy," said Xu.

 

Soy oil prices declined in the week to Friday.

 

First-grade soy oil prices in Zhangjiagang were around RMB6,300/tonne, compared with RMB6,500/tonne a week ago.

 

In Rizhao, they were around RMB6,300/tonne, compared with RMB6,450/tonne a week ago.

 

US$1 = RMB6.83967 (Mar 6)