May 10, 2006

  

Asia Soybean Outlook: China buying to slow down

 

 

Asian demand for soybeans is expected to slow down in the week ahead as the world's biggest soybean importer, China, may cool its soybean imports.

 

A Beijing-based trader with one of China's biggest grains trading companies said the country has more than enough stocks of soybeans, and imports may slow down in the next few weeks.

 

The trader added that South American soybean prices, which have been cheaper than U.S. soybeans for the past several weeks, are now catching up with U.S. prices. This will likely add to Chinese buyers' lack of enthusiasm for more imports, he said.

 

But in terms of import shipments, China is expected receive around 3.5 million tonnes of soybeans in May.

 

China's imports of soymeal, largely from India, has also slowed down considerably as India doesn't have much soymeal stocks left to sell.

 

At present, the premium on soybeans delivered to China from Brazil is at 110 U.S. cents a bushel above the CBOT July contract.

 

In Japan too, soybean buying has been at a slow pace. Traders said they don't expect much increase in buying in the next few weeks.

 

They added that Japan is buying soybeans from both the U.S. and South America.

 

In South Korea, a manager in one of the country's largest feed-buying groups said traders are preparing to import soymeal for a November shipment, but may not place orders in the next few weeks.

 

"There's no rush in booking November soymeal shipments. Anyway, international prices are hardening, so it's better to wait," the manager said.

 

There have been no major soybean or soymeal import deals reported in Asia over the past seven days.

 

In the meantime, the Taiwan Sugar Corp. is seeking to buy 12,000 tonnes of soybeans in a tender to be concluded on Thursday for a June-July shipment.

 

In the U.S. market, CBOT soy futures may remain supported through the week as continued disruption of Brazilian soybean shipments may translate to more exports from the U.S.

 

Brazilian farmers have been protesting against low soybean prices for the last three weeks and even blocked some rail traffic in soybean producing areas on Tuesday.

 

According to a commentary on CBOT's Web site, Chinese buyers are showing interest in buying U.S.-origin soybeans for June and July shipments.

 

In other news, India's soymeal exports in April were 316,925 metric tonnes compared with 99,250 tonnes in the same month last year, according to data provided by the Solvent Extractors Association, an edible oil industry lobby group.

 

The association said the bulk of soymeal sales during April were made to Vietnam, South Korea and China.