China soy buyers to slow down after large purchases

Chinese soy importers are expected to slow down their purchases in the coming weeks after earlier heavy bookings covered requirements until January, an official survey by the China National Grain and Oils Information Centre (CNGOIC) showed.

 

China has procured more than 15 million tonnes of US soy and six million tonnes of South American new crop.

 

The centre said imports are estimated to hit four million tonnes each month in December and January.

 

According to the centre, the fall in Chicago Board of Trade soy prices has spurred Chinese buyers to increase their purchases. Thus, China's November imports will rebound to 3.5 million tonnes, up from 2.52 million tonnes in October.

 

Meanwhile, prices of soyoil remained stable over the week. The centre said in the near term, expensive imports will support domestic prices but ample supplies will restrict any further rise.

 

On the other hand, the soymeal market has turned bearish as the increase in soy arrivals has prompted crushers to reduce the soymeal prices. Meanwhile, market participants believe the low import costs of soy will heap some downward pressure on soymeal prices. As a result, feed mills are waiting for prices to drop before making large purchases.

 

The corn market remained strong during the week in review. Supplies were tightened as bad weather conditions in northern China saw a reduction in sales by farmers and worsened transport to markets in the consuming south.

 

The wheat market stayed firm over the week due to a recovery in sales of flour. Meanwhile, market participants are anticipating whether Beijing will raise the minimum bidding prices again at the weekly auctions.

 

The centre provided the following data:

   

　	Nov 11	Nov 4	Oct 28
Soy	50.60	50.00	51.30
Soymeal	43.60	44.50	46.80
Soyoil	53.30	50.00	48.30
Corn	53.80	51.20	50.20
Wheat	53.30	52.40	51.90
Notes: A reading below 50.0 indicates that participants are bearish, a reading of 50.0 indicates they are neutral and a reading above 50.0 indicates they are bullish. The indexes are based on data collected from 400 market participants, including storage companies, oilseed processors and traders in China's 17 major producing and consuming provinces.