March 23, 2007

 

China soybean prices steady; unlikely to change much next week
 

 

Soybean prices in China's major producing regions were largely unchanged in the week to Friday and are likely to remain stable in the coming week.

 

In Harbin, the provincial capital of Heilongjiang province, China's largest soybean growing region, prices of average-quality soybeans were about RMB2,900/tonne, flat from a week ago.

 

Prices in the north-eastern part of the province were at RMB2,800-2,840/tonne, little changed from RMB2,800-2,820/tonne a week earlier.

 

Dealers are reluctant to purchase soybeans, as cash prices are high while futures prices are not showing a clear direction, said a Beijing-based analyst.

 

Domestic soybean futures traders are waiting for the Mar 30 planting report from the US Department of Agriculture to guide their trade, said traders.

 

The market widely expects US farmers to grow more corn at the expense of soybeans due to high global corn prices. The issue is how much more corn farmers will grow.

 

The Beijing analyst expects soybean cash prices to decline slightly further in the short term, as farmers are willing to sell ahead of the planting season in April and May, while sluggish domestic corn prices may spill over to soybeans.

 

However, another analyst said despite expectations of more supply, soybean prices will be supported by demand from processing plants, so they are unlikely to change much.

 

Corn prices in China's major producing regions were slightly lower in the week to Wednesday as supply picked up.

 

Demand from the livestock-breeding sector has not fully recovered, adding pressure to corn prices.