October 26, 2009

Chinese crushers have mostly completed their soy purchases from the US for the rest of the year and they are actively buying US and South American cargoes for shipment next year, according to an official survey by China National Grain and Oils Information Centre (CNGOIC).

China has already purchased up to five million tonnes of soy from South America and 15 million tonnes from the US, the world's largest exporter.

The centre said Chinese buyers are expected to maintain their purchase volumes at a normal level and it added that costs for imports were still lower than prices offered for government reserves.

The soyoil market was weakened compared to last week as domestic traders were unwilling to stock up more inventories. There were sufficient supplies in the market due to the new soy harvest and a record edible oil imports in September.

Meanwhile, the soymeal market rose as it was supported by strong soy prices and tight market supply. Domestic crushers in the coastal regions had scaled down their productions as a result of low soy imports.

On the other hand, corn prices have rebounded sharply over the past week due to a supply shortfall from farmers. The farmers were waiting for the relevant government policy and thus were unwilling to sell their new corn harvest. Beijing has pledged to extend its stockpiling scheme into the new crop year but has not said at what prices the government would purchase.

Wheat prices are expected to stay at current levels until the end of 2009 after the Chinese government raised its bidding prices at weekly auctions by RMB40-50 (US$5.86-US$7.32) per tonne.