May 29, 2010

 

China's soy prices stable amid light trading

Soy prices in major producing areas of China were mostly stable in the week to Friday (May 28), with trading light as farmers were busy at spring planting.

 

But prices in some areas were lower as farmers were not selling actively while traders reduced bidding prices.

 

Prices in Jiamusi in Heilongjiang province were RMB3,440-RMB3,480 (US$504-US$509) a tonne, stable from a week ago. Prices in Suihua in the same province were RMB3,480-RMB3,540/tonne (US$509-US$518), slightly lower than RMB3,500-RMB3,600/tonne (US$512-US$527) a week earlier.

 

As of Tuesday (May 25), farmers in Heilongjiang, the biggest producer, had completed 95% of the planned soy planting. Bad weather has delayed spring planting by 10-15 days.

 

High local soy stocks and normal US weather outlook in major producing areas will limit any rise in soy prices in the mid- to long term, said Fei Zhonghai, an assistant manager at Cofco Ltd.

 

Soyoil prices were slightly lower due to weak demand.

 

Fourth-grade soyoil prices in Dalian were RMB7,250-RMB7,300/tonne (US$1,061-US$1,069), down from RMB7,300-RMB7,350/tonne (US$1,069-US$1,076) a week earlier. Fourth-grade soyoil prices in Shandong province were RMB7,150-RMB7,200/tonne (US$1,047-US$1,054), stable from a week ago.

 

Soyoil prices are likely to be supported by falling imports and lower local supply due to reduced profits at processors, China National Grain and Oils Information Centre said in its report.

 

Soymeal prices were lower due to expectations of ample supply, as soy import volumes will remain high in the May-July period.

 

Prices in Dalian were RMB2,850-RMB2,920/tonne (US$417-US$427), compared with RMB2,920-RMB3,050/tonne (US$427-US$446) a week earlier. In Guangdong province, they were RMB2,830-RMB2,880/tonne (US$414-US$422), down from RMB2,850-RMB2,980/tonne (US$417-US$436) last week.

 

The recovery in feed meal demand is not as strong as the market has expected, said industry participants.

 

Outbreaks of blue ear and foot-and-mouth disease this year are more serious than usual, hurting breeders' interest in raising more hogs, Tangzhishen Investment Management Co. analyst Xia Rui said at an oil and grain conference earlier this week.