September 7, 2007

China soybean prices little changed in thin trade; Stocks low
 

Soybean prices in China's major producing regions were little changed in the week to Friday (Aug 31), as trading was very light due to a lack of supplies, analysts and traders said.

"The market was very quiet, as there was not much domestic soybean left," said Wang Shiliang, a trader at Jilin Grains Centre.

In Baoqing, Heilongjiang province, China's largest soybean-growing region, prices of average-quality soybeans were about RMB3,340-3,360/tonne, little changed from a week earlier.

Prices in Jiamusi City in the north-eastern part of the province were between RMB3,300/tonne and RMB3,400/tonne, also unchanged from a week earlier.

"Crushers' active buying earlier amid expectations of higher prices has forced some small crushers to operate at only a portion of their total capacity," Wang said.

Soybean prices have been supported by strong demand for soymeal, and now that there is not much domestically produced soybean stocks left, imports will likely grow in the fourth quarter, traders said.

China's next soybean harvest will take place in November.

"The environment now supports further gains in soybean prices, but growth is expected to be steady," said Gao Yanrong, an analyst with Dalu Futures Co.

Expectations of lower domestic production this year, combined with gains in wheat prices and speculative money inflows into the futures market, will continue to underpin soybean prices, Gao said.