April 21, 2008

China anticipates bullish soy market

Chinese soy traders expect a bullish market as crushers start active purchases in the coming week, due to fears that prices will rise further, a survey by an official think tank reported Friday.

The China National Grain and Oils Information Center (CNGOIC) forecast an increased demand for soy.

A wide gap between global and Chinese soy oil prices will drive up the domestic price and also market demand as crushers see less possibility of a price drop and merchants need to replenish stocks, the CNGOIC said.

The center noted expectations for soy oil prices have turned from bearish to neutral.

China's wheat market will also tick up as reserves in the country's Jiangsu province have almost been consumed and local mills need to buy from other regions.

Feed demand increased sharply as pig and chicken farmers increased their stocks, the CNGOIC said.