China soy area rains hurt crop; oil prices pressured

Rain and low temperatures in China's major soy and corn producing Heilongjiang province have affected crops, the China National Grain and Oils Information Centre said Wednesday.

 

Unfavourable weather has slowed growth so far this year, but expected warmer weather this month will help the crops recover, the state-backed think tank said in its monthly report.

 

Meantime, vegetable oil prices may continue to fall amid ample domestic supply and weak demand, it said.

 

Soyoil imports are expected to reach 250,000 tonnes in June, up nearly 50 percent compared with last June. Traders aren't inclined to build soy stocks as they expect the government to release inventories it has accumulated as part of a price-support programme, the CNGOIC said.

 

Palm oil imports are estimated at 550,000 tonnes and 650,000 tonnes in June and July, respectively, while imports in August are estimated at 550,000-650,000 tonnes, it reported.

 

Export demand for soymeal remains high, which will help support higher prices, it said.

 

But rising soy import costs and declining soyoil prices are offsetting any rise in soymeal prices, and processing plants will see losses later this month if they don't boost both soyoil and soymeal prices, it said.

 

Following are the center's revised forecasts for imports and domestic output of major vegetable oil and oilseed products in the 2009-10 crop year as well as on-year changes.

 

                 Imports        Change        Output           Change

              (000 tonnes)   On Year      (000 tonnes)    On Year

Soy               37,000     -4,000           15,000           -500

Edible Oil        8,170         -380           17,420            -70

Soyoil            2,300         Unch            7,810           +180

Soymeal          N.A.         N.A.            33,910          +1,280

Rapeseed        1,400      -620             13,000           +900

Rapeseed Oil    200        -180              4,810           +150