August 24, 2009

Chinese crushers are likely to continue brisk imports of the new and cheap US soy crop in the coming weeks, the China National Grain and Oils Information Centre (CNGOIC) said on Friday (Aug 21).

The US soy price for January shipment reached RMB3,550 (US$519.4), which was six percent lower than China's bidding price for its soy reserves and the centre said the price differential would continue to spur imports in the weeks ahead.

Despite the decline in soyoil prices last week, the coming National Day and Mid-Autumn Festival holidays in October would likely drive traders to stock up their inventories.

Meanwhile, the soymeal market is expected to remain weak with prices on the downtrend amid ample supplies as crushers take advantage of the better crushing margins and raise output. The centre added that soymeal purchases are expected to remain lower than normal in coming weeks.

Sales of corn at the government weekly auction were boosted to one million tonne last week as the drought conditions in the northeastern region could threaten the output. Corn prices rose in northern China due to tight supplies and the increased difficulties in transporting corn outside the northeast.

Meanwhile, the wheat market was on the rise after flour mills increased their purchases as sales of flour picked up.