March 26, 2007

 

Asia Grain Outlook on Monday: Soybean imports to rise on Chinese buying

 

 

Asian soybean imports are expected to increase at a brisk pace, with China - the world's largest soybean importer - buying 8-10 soybean cargoes every week.

 

Last week, Chinese traders imported around 10 cargoes of fresh soybeans, and all were of South American origin, Chinese traders said.

 

Around four cargoes were from Brazil, while the remaining six were from Argentina.

 

According to commodity analysts JCI Shanghai, the price is around 143-146 U.S.cents/bushel to the Chicago Board of Trade July contract for Brazilian soybeans, while for Argentine soybeans, it's 122-128 U.S. cents/bushel to the CBOT July contract.

 

Most of the fresh import orders are meant for delivery to China in May and June.

 

However, analysts said that the current brisk pace of soybean imports may slow after a few weeks, as soybean and soymeal stocks are building up in China, while domestic demand for both soy oil and soymeal remains quite flat.

 

According to JCI Shanghai's estimates, imported soybean stocks at the main Chinese ports totaled around 2.75 million tonnes as of March 23.

 

China's soybean imports in February rose 5.3% on year to 1.18 million metric tonnes, the General Administration of Customs said last week, adding that imports in January-February rose 28.5% on year to 3.61 million tonnes.

 

Meantime, after a long gap, a feedbuying group in Asia bought soymeal through an international tender.

 

International trading house Cargill will supply 55,000 tonnes of optional-origin soymeal to South Korea's Nonghyup Feed Inc. at US$245.20/tonne for Sept. 15 arrival in South Korea.

 

As for corn, demand emerged from South Korean buyers, although actual purchases remained short of intended purchases, as high corn prices continued to discourage buyers.

 

While Nonghyup Feed Inc. had set out to buy 250,000 metric tonnes of feed corn in tender last week, it bought only around 110,000 tonnes.

 

Meanwhile, the Korea Corn Processors' Association canceled all bids in its purchase tender for 110,000 tonnes of food corn last week. An association official said a re-tender may take place this Wednesday.

 

Wheat imports in Asia will likely remain quiet for one more week at least, as Japan's Ministry of Agriculture has finished its milling wheat imports for the financial year ending March 30, 2007.

 

Grains prices are likely to remain range-bound globally this week, as the market is awaiting the U.S. Department of Agriculture's report on U.S. farmers' likely sowing intentions this summer, which will be released Friday.

 

While it is widely expected that corn acreage in the U.S. will rise this summer at the expense of soybean acreage, the market is interested in the extent of the change in acreage.