China's crushers to reduce overseas soy purchases

With China projected to receive record soy imports in December and January and coupled with Beijing's subsidies for domestic soy, crushers in northern China are likely to reduce their overseas purchases, according to an official survey by the China National Grain and Oils Information Centre on Thursday (Dec 3).

According to the centre, soy imports in December are expected to reach 4.8 million tonnes, which is higher than the record set in June, while January imports are estimated to remain at the same high level.

Qualified crushers in the northeastern region have begun to buy domestic soy after Beijing agreed to offer subsidies, thus providing them a good crushing margin.

China's soyoil market turned bullish over the week as traders stockpiled their inventories in preparation for the New Year holidays. The recent rise in retail prices has spurred an increase in soyoil demand, which would support prices at a high level in the near term.

Meanwhile, the soymeal market stayed weak as feed mills were cautious in signing new contracts due to the high prices.

Similarly, the corn market was weakened after farmers sold large volumes in the northeast, while corn prices in heavy consuming areas of the south have also begun to drop. In the coming weeks, active procurements by feed mills and warehouses are likely to lend some support to prices in the northeast region.