November 22, 2010

China soy prices down slightly on weak futures

Soy prices in China's major producing areas declined slightly in the week to Friday (Nov 19), as lower domestic agricultural futures prices earlier this week weighed on the spot market.

Soy prices in Jiamusi, in the major producing province of Heilongjiang, were around RMB3,800 (US$572) a tonne, around RMB40 (US$6) lower from a week ago.

Prices in Harbin, also in Heilongjiang, were also around RMB3,800/tonne, down about RMB120 (US$18) from a week ago.

Soy futures on the Dalian Commodity Exchange were much battered early this week amid widespread bearish sentiment in commodity and equity markets as investors feared Beijing would introduce more monetary tightening measures to contain inflation and cool the buoyant economy.

The benchmark soy contract on the Dalian bourse Monday fell to an almost two-week low of RMB4,452 (US$670)/tonne on follow-through selling as the tightening concerns lingered.

Soy prices on the physical market may be able to reverse the downtrend and post a steady increase next week on the back of firm downstream demand and continued restocking at soyoil processors, analysts said.