China may cut soy purchases soon

 

 

China may cut soy purchasing in coming weeks because of growing stocks, a factor which could help weaken global soy prices, Hamburg-based oilseeds analysts Oil World said on Tuesday (June 8).

 

"There is a high probability that China will become a very reserved buyer of soy in the next few weeks," it said, noting that there could even be increasing cancellations.

 

The very large exports of new crop soy from South America during April and May and large shipments scheduled for early June are apparently resulting in excessive soybean stocks at Chinese ports, it said.

 

There have been reports of handling and storage problems because of large soy volumes entering the country. South America boosted total exports of soy by 5.7 million tonnes or 46% from last year in April and May 2010, most of which went to China, it said.

 

Argentina and Brazil are the main South American soy exporters. China has been raising soy crushings partly due to a soyoil import dispute with Argentina.

 

Meanwhile, strong global export demand, including from China, has helped support global soy prices during past weeks, but a prospective sizable reduction of exports to China in the second half of June and in July is likely to have a bearish (price) impact, it said.