June 26, 2006

 

China soybean prices slightly down; pressured by imports

 

 

Soybean prices in China fell slightly in the week to Friday (Jun 23), on a huge amount of arrivals, while weaker soybean futures failed to lend any support, analysts said.

 

In Heilongjiang, China's biggest soybean-producing province, prices of average quality soybeans fell RMB10 to RMB2,230-RMB2,290 a tonne.

 

In Jilin province, another major soybean-producing area in China's northeast, prices were RMB20 lower to be quoted around RMB2,440-RMB2,460/tonne.

 

"Falling prices of soymeal and soyoil, plus a large amount of soybean imports arrived at the ports, heavily weighing on local soybean prices," said Zhang Liwei, an analyst at the China National Grain and Oils Information Centre.

 

"Meanwhile, CBOT futures also failed to send a positive signal to China," he added.

 

Local traders said crushers in central China began to buy more imports, which resulted in slower sales of soybeans in major producing regions in the northeast.

 

Feed demand in June was even weaker than in May, with inventories quickly building up at crushing plants, traders said.

 

However, prices are unlikely to fall much, as planting area this year is estimated to fall by 10 percent, while futures prices are not likely to drop much further, said Zhang.

 

COFCO Futures Co said arrivals of imports in Jun 11-20 were around 1.37 million tonnes, which means imports in June have so far already reached 2.63 million tonnes.

 

It estimates total arrivals will be around 3.4 million tonnes in June.

 

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