June 12, 2006

China's soybean prices slightly lower; more imports seen
 

Soybean prices in China's major producing regions slightly fell this week as soybean futures on the Chicago Board of Trade weakened while local demand was little changed.

In Heilongjiang, China's largest soybean-producing province, prices of average quality soybeans fell around RMB30 to RMB2,240-2,290/tonne.

"Farmers in Heilongjiang still have more stocks than other provinces, so cash values are more vulnerable to outside factors when demand is unchanged," said Zhang Liwei, an analyst at the China National Grain & Oils Information Center.

In Jilin province, another major soybean-producing area in China's northeast, prices were quoted around RMB2,460-2,500/tonne, largely unchanged from the previous week.

Meanwhile, crushing margins are narrowing with less demand for soyoil in summer. Crushers, as a result, are trying to buy soybeans at lower prices, analysts said.

"Prices are not very likely to fall further greatly. It's already low enough, and the market has responded to the predicted huge arrivals," said Zhang.

COFCO Futures Co said total import arrivals in May reached 3.03 million tonnes, exceeding its previous estimate of 2.8 million tonnes.

Total arrivals in June, it estimated, are likely to be around 3.6 million tonnes.

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