November 12, 2007

Asia Grain Outlook on Monday: Soy prices bullish on China demand

Asian buyers may face higher offers for soy as prices of the grains climbed to new contract highs Friday on bullish demand, positive crop report data and support from record crude oil prices, analysts said Monday.

Strong underlying export demand, especially from China - the world's largest importer of soybeans - helped to lift futures prices.

The U.S. Department of Agriculture announced Friday private export sales of 115,000 metric tonnes of soybeans for delivery to China in the 2007-08 marketing year, ending Sept. 30.

China's soybean imports in the January to October period totaled 24.54 million tonnes, up 4.5% from a year earlier, the General Administration of Customs said Monday.

Expectations of even higher crude oil prices around US$100 per barrel through the end of the month attracted fresh speculative buying and is sustaining the bullish momentum in soybeans, said analysts.

Record-high crude oil prices are lending support to biofuels and its raw materials such as soyoil.

November soybeans settled 15 cents higher at US$10.43 and January soybeans ended 14 3/4 cents higher at US$10.56. December soymeal settled US$3.40 higher at US$281.80 per short tonne. December soyoil finished 93 points higher at 45.08 per pound.

Crop data was also supportive of prices as USDA pegged 2007-08 soybean production at 2.594 billion bushels versus the average of trade estimates at 2.606 billion.

The USDA projected U.S. 2007-08 soybean ending stocks at 210 million bushels, down 5 million bushels from the October forecast and below the average of trade estimates at 213 million bushels.