China fails to sell soy at auctions; prices too high

The Chinese government failed to sell soy during auctions Thursday (July 23) as the sale prices were set too high, said analysts.

The government had planned to sell 500,000 tonnes of soy from its reserves but none were sold as the prices were much higher than local prices.

"(The result) is within market expectations, and the market expected the government to provide subsidies to processors" in order to sell the reserve soy, said Wang Xiaoguang, an analyst with Galaxy Futures.

Some analysts said there will be more downward pressure for soy prices going forward as the government will sooner or later sell its reserves.

Rainy weather in the northeast producing areas this year has made it more difficult for the government to preserve its huge soy stocks, said Ma Yangqing, an analyst with Guangfa Futures.