May 2, 2012

China seeks more US soy purchase

In the near future, China will possibly purchase even more US-origin soy because of poor South American crops, stated Hamburg-based oilseeds analysts Oil World on Tuesday (May 1).

"Chinese buyers will increasingly shift to US-origin in the coming weeks because South American supplies are becoming tighter," Oil World said.

Chicago soy futures rose to their highest levels since 2008 last week largely on expectations looming poor soy crops in Argentina and Brazil will transfer demand to the United States. Large sales of US soy were reported to China on Monday.

"We expect that insufficient South American supplies will result in a contra-seasonal increase in US soybean exports to China in June/August 2012, the last quarter of this season," Oil World said.

"In our preliminary estimate we expect US soybean exports of at least 2.3 million tonnes to China in June/August 2012 compared with 0.6 million tonnes in the same three months of last year."

The good export outlook means Oil World has cut its forecast of US end-August 2012 soy stocks to 5.80 million tonnes, down from its March forecast of 6.30 million tonnes and down from 5.85 million tonnes in August 2011.

China's soy demand is likely to keep increasing in coming months, it said.

"US exports to China will gain momentum and, most likely, reach a new record in September/February 2012/13," it said.