September 20, 2010

China's soy prices remain stable ahead of new harvest

Soy prices in China's major producing areas were mostly unchanged in the week to Friday (Sep 17), with crushers and trading houses awaiting the new harvest early next month.

Soy prices in Jiamusi, in the major producing province of Heilongjiang, were around RMB3,380-3,520 (US$503.37-524.21)a tonne, unchanged from a week ago. While prices in Harbin, also in Heilongjiang, were around RMB3,400-3,560 (US$506.34-530.17) per tonne, compared with RMB3,440-3,560 (US$512.30-530.17) per tonne a week ago.

Prices are likely to remain steady in the next few weeks as soy consumers and trading houses retreat to the sidelines ahead of the new crop.

Analysts said the market is relatively balanced as soy consumers are still destocking what was accumulated last year, and with the government holding its first soy auction this year.

But prices will come under pressure from increased supply once harvest commences after the end of the week-long National Day holiday on October 7, analysts said.

China's soy production in the crop year starting October 1 is expected to fall slightly, but will still be ample, with the state-backed China National Oil and Grain Information Center (CNOGIC) Thursday forecasting soy output to fall 1.3% from this year to 14.8 million tonnes.

Soyoil prices were largely steady as a rise in due to the Mid-Autumn Festival tailed off. Soymeal prices inched up on the back of continued feedstock demand.

Fourth-grade soyoil prices in Jiamusi were around RMB8,000 (US$1,191) per tonne, unchanged on week. While soymeal prices in Lianyungang, Jiangsu province, were around RMB3,270 (US$486.94) per tonne, compared with RMB3,250 (US$483.96) per tonne a week ago.