July 27, 2009

Soy prices in China's major producing areas rose in the week to Friday (July 24), along with a rise in the futures market.

 

Soy prices in Harbin city in Heilongjiang, a key growing province, were around RMB3,600 a tonne, compared with RMB3,560 a week earlier.

 

In Jiamusi, also in Heilongjiang province, prices were at RMB3,520/tonne, up from RMB3,500 last week.

 

The government offered to sell 500,000 tonnes of soy from its reserves Thursday, and domestic futures prices rose ahead of the auction in the expectation it would fail as the base price was set much higher than market prices.

 

The government did fail to sell any of its soy on Thursday (July 23), which caused market speculation the government may provide subsidies to soy processors in order to release its reserves.

 

Some traders set up long positions expecting cash supply to remain tight for a while amid policy uncertainty, said a local analyst.

 

Soyoil prices were slightly higher, but trading was very light.

 

First-grade soyoil prices in Dongguan in Guangdong province were RMB7,000-RMB7,050/tonne compared with RMB6,800/tonne a week ago.

 

In Rizhao in Shandong province, they were around RMB7,000/tonne, up from RMB6,750/tonne.

 

Soymeal prices were slightly higher on stronger US soymeal futures prices.

 

In Dongguan, soymeal was around RMB3,350/tonne, up from RMB3,300/tonne a week ago. In Rizhao, it was around RMB3,300/tonne versus RMB3,250/tonne.

 

However, weak domestic demand won't push prices much higher, said analysts.