China soy buyers up US crop purchases on lower prices
China's soy buyers are increasing purchases of US soy cargoes for the 2010-11 marketing period after a decline in CBOT prices last week, the China National Grain and Oils Information Center (CNGOIC) said.
Large imports from May-July by China, the world's largest buyer, could restrain fresh demand for near-month cargoes from South America, the center said in a report on Friday (May 7).
Soy prices in major producing areas of China were lower in the week to Friday as the government's purchases of crop from last year's harvest concluded. Prices in Jiamusi in Heilongjiang province were at RMB3,440-3,500 (US$503.87-512.66) a tonne, down from RMB3,600-3,740 (US$527.31-547.82) per tonne a week ago; while prices in Suihua in the same province were at RMB3,500-3,600 (US$512.66-527.31) per tonne versus RMB3,640-3,760 (US$533.17-550.75) per tonne a week earlier.
Soy planting in the northeast is delayed for at least 10-15 days due to low temperatures, said He Shuwen, a farmer in Heilongjiang province. According to CNGOIC, the delayed planting will reduce soy output and quality, adding if soy planting is delayed for 10 days, output will fall 15% on year.
Soy intended planting areas in Heilongjiang province this year will fall 8% to 4.33 million hectares due to competition from other crops such as corn, according to a survey by CNGOIC.
Meanwhile, soyoil trading remains thin amid weak demand. Supplies are ample and given that large amount of soy will arrive in the coming months, soyoil prices could weaken. Soyoil prices were mostly stable, with prices lower in some areas due to weak demand.
Soymeal consumption has improved this week compared with previous weeks, but large soy imports could result in a surplus of supplies.
On the other hand, corn prices in the northeast and north kept rising this week as the market was worried over a deficit in supply. Market players estimate that state temporary reserves are low and not big enough to support weekly auctions for long.
