June 2, 2008

China soy bullish on tight supply

China's soy and soymeal markets remained strong due to tight supply, while soy oil was weak on ample stock, an official think-tank survey shows.

The outlook for soy improved as more crushers expressed interest to import after a decline in freight rates, the China National Grain and Oils Information Center (CNGOIC) said Friday.

Weak soy oil prices have enabled crushers to profit from higher soymeal prices and have pushed prices up to more than RMB4,000 (US$576.6) per tonne, a rise of 15 percent on-month.

Large arrivals of soy oil in May and June in China will continue to pressure soy oil prices, with soy oil demand in coming weeks to stay at lower levels as more refineries increased their use of cheaper palm oil during the summer, CNGOIC said.

Meanwhile, China's corn market outlook remained bullish but was lower than last week.