June 11, 2007

China's corn outlook strong while soy and soymeal improve

The outlook for soyoil and corn is looking bullish for the fifth consecutive week, while forecasts for soy and soymeal have improved, a survey by the China National Grain and Oil Information Centre (CNGOIC) found.

The outlook for soy picked up this week after rising soyoil prices boosted crushing margins. Crushers had increased production and imports of the oilseed, the report said.

The soyoil market stayed strong this week, supported by rising international prices. With China, prices rose across the country, which had the result of encouraging more buyers.

The outlook for soymeal has improved, although it remains bearish. Crushers were unwilling to lower their quotations despite high stocks amidst improved demand.

The outlook for corn was strong and the market was expecting prices to keep rising. Trading houses were holding corn on expectations of even higher prices in July. The high corn prices is making wheat attractive to feedmills.

However, the wheat market remained bearish as new harvest came on the market, boosting supplies. This, coupled with Beijing's minimum prices for wheat, which are lower than current market prices, added to the bearish wheat market.