July 28, 2008

Strong soy buying continues in China even as soymeal and corn remains weak

China's soy crushers and traders continued strong soy imports due to falling international soy futures , a survey by an official think-tank showed on Friday (July 25, 2008).

International soy futures continued falling, encouraging Chinese plants and traders to import. In the next few weeks, traders and plants would continue to actively purchase imported soy, after buying at least 17 cargoes last week, according to the survey by China National Grain and Oils Information Centre (CNGOIC).

China has bought about 400,000 tonnes of soyoil and up to 1 million tonnes of soy for its reserves in the past week.

However the soymeal market was still looking down, as demand from the animal feed industry remained low on falling meat prices.

Meanwhile, China's corn market was expected to weaken following state reserves sales in the northeast, the survey said.

China sold 300,000 tonnes of temporary corn reserves last week, auctioned at a base price about RMB 100 below market levels, it said. Bureaus often sell corn to rotate, or clear space before the new harvest.

"Regular auctions of corn from state reserves are expected to increase supply and limit spot price in July and August," said the China National Grain and Oils Information Centre (CNGOIC) in the survey.

The centre's survey also showed traders are now slightly more bullish on soy but more bearish on corn and soymeal than previous weeks.