May 26, 2006

 

China soy prices little changed, more arrivals ahead
 

 

Soy prices in China's major producing regions remained stable this week, without many changes in either supply or demand, while the futures market also failed to provide further rising momentum, said analysts and traders.

 

In Heilongjiang, China's largest soy-producing province, prices of average quality soy were little changed at RMB2,280-RMB2,360 a tonne.

 

In Jilin province, another major soy producing base in China's northeast, prices were at RMB2,480/tonne on average, unchanged from the previous week.

 

Given the oversupply market, crushers have been trying to keep their stockpiles of soy at a low level by selling cheaper soymeal and soyoil.

 

"As feed demand has not seen a countrywide recovery till now, crushers are adopting the strategy to protect themselves," said Li Ke, an analyst at the China National Grain & Oils Information Centre.

 

With the futures market in the consolidation period, impacted by the volatility of metals and oil, soy's cash values did not gain support from futures, as had happened in the previous week.

 

"We estimate that monthly arrivals of soy imports in May-July will exceed 2.5 tonnes, which will be an even bigger pressure on cash values," Li said.

 

Meanwhile, farmers in Heilongjiang province still have 1-1.5 million tonnes of soy stocks, Li said.

 

COFCO Futures Co said total arrivals in May 1-20 were around 1.74 million tonnes, and 2.8 million tonnes of total arrivals in May.

 

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