May 23, 2011

Soy prices in China's major producing areas were stable in the week to Friday (May 20), as spring sowing has put farmers on the sidelines and the outlook remains uncertain.

Demand from crushers remains low, with port stocks rising 214,000 tonnes from a week earlier to 6.2 million tonnes, the Chinese Grain Network, a consultancy owned by China Grain Reserves Corp or Sinograin, said in research note Friday.

The average price in the major producing province of Heilongjiang hovered around RMB3,800 (US$585)/tonne, unchanged from a week earlier, while prices in major ports were about RMB4,000 (US$615)/tonne, also flat.

The outlook for the cash market remains highly uncertain, subject to demand from a recovering animal-raising sector and support from reduced acreage, the consultancy said.

Sowing in the northeastern province of Heilongjiang, the top soy producer, whose output accounts for about 40% of the country's total, has basically been completed. Planting area has dropped to about 3.3 million hectares from 4.5 million hectares last year, according to the local agricultural department.

Only 225,800 tonnes of soy have been sold since the provincial auctions started in December last year, or 11% of the amount it offered, sources said. Sales from state reserves have also been very low.