December 6, 2010

China soy prices mostly stable

Soy prices in China's major producing areas were mostly unchanged in the week to Friday (Dec 3), with the cash and futures markets both having corrected in the past three weeks to become stable.

Soy prices in Harbin in the major producing province of Heilongjiang were around RMB3,800 (US$570) a tonne, flat from a week earlier. Prices in Lian Yungang in Jiangsu province were around RMB4,100/tonne (US$615), also unchanged.

The government's recommended purchase price, which was RMB3,800/tonne (US$570), was supportive for spot prices.

"Crushers are willing to buy at the current price level," said Zhu Jinming, an analyst at Zheshang Futures Co. But some farmers are expected to sell higher, he added.

The central government's auction of about 300,000 tonnes Friday failed to attract any bids as the floor price was set at RMB3,920/tonne (US$588), which was too high, according to analysts. However, about 55,000 tonnes were sold at a local auction in Harbin at a much lower average price of about RMB3,772/tonne (US$566).

The Heilongjiang Soybean Association said spot soy trading was sluggish in the past few weeks as transportation was hit by heavy snowfall in north-eastern China.