China soy prices tad down as government sales hit sentiment

Soy prices in China's major producing areas were slightly lower in the week to Friday (July 31), pressured by government sales.

 

Prices in Harbin city in Heilongjiang, a key growing province, were around RMB3,580 (US$524.01) to RMB3,600 (US$526.93) a tonne compared with RMB3,600 a week earlier.

 

In Jiamusi, also in Heilongjiang province, prices were at RMB3,480 to RMB3,520/tonne, down from RMB3,520 last week.

 

Although the government failed to sell any soy from its reserves to the market during the two sets of auctions which began last week due to high auction prices, the supply pressure hovering over the market hasn't eased, as it still has to sell millions of tonnes of soy by the coming harvest beginning September.

 

There is little soy supply left in the market, as most is controlled by the government, leaving trading very light.

 

Soyoil prices were consolidating, with a fall seen earlier this week, but they recovered the losses later along with a rise in the futures market.

 

First-grade soyoil prices in Dongguan in Guangdong province were at RMB7,000-RMB7,050/tonne, unchanged from a week ago.

 

In Rizhao in Shandong province, they were around RMB6,800 to RMB6,950/tonne, down slightly from RMB7,000/tonne.

 

Ample domestic soyoil supply means there is little possibility for soyoil prices to rise much, and demand will remain weak in the coming weeks, the China National Grain and Oils Information Center said in a note.

 

Soymeal prices were stable to slightly lower, and weak feedmeal demand is likely to keep prices at current levels, said analysts.

 

Some processors suspended production due to low profits amid weak demand, helping to support the prices.

 

In Dongguan, soymeal was around RMB3,350/tonne, stable from a week ago. In Rizhao, it was around RMB3,280/tonne versus RMB3,300/tonne.

 

US$1 = RMB6.83 (July 31)