April 24, 2006

 

China soybean prices continue to fall; recovery seen June

 

 

Soybean prices in China's major producing regions continued to fall this week, as crushers kept cutting their buying prices in order to improve their balance sheets, analysts said.

 

"Given the falling soymeal prices, crushers could only chose to lower their costs and keep their buying price for soybeans as low as possible," said Zhang Liwei, a soy analyst at the China National Grain and Oils Information Centre.

 

After all, animal feed demand is still weak, analysts said.

 

In Heilongjiang province, China's largest soybean-producing region, prices of average quality soybeans mostly fell RMB80 to around RMB2,280 a tonne.

 

In some eastern and northern part of the province, prices fell RMB60-RMB80 to RMB2,140-RMB2,200/tonne.

 

Meanwhile, prices in Jilin, another major producing province in the north-east, were at RMB2,340/tonne, down RMB40/tonne from a week ago.

 

Cheap imports put a lot of pressure on local grown soybeans.

 

Although current soybean prices are already lower than the growing cost, some farmers still chose to sell if they urgently need money to buy things necessary for spring ploughing, Wang said.

 

There's only a week before the Labour Day Holiday, and people still have not seen any sign that feed consumption is going to pick up, analysts said.

 

Meanwhile, trading is still quiet and most crushers were reluctant to buy much.

 

"This means people will probably have to wait until June," Wang said.

 

China confirmed the 12th human death from bird flu Friday.

 

COFCO Futures Co estimated a total of 2.6-2.7 million tons of soybean arrivals in April.

 

China National Cereals, Oils and Foodstuffs Corp., a major grains trading company, holds a controlling stake in COFCO Futures Co.