December 10, 2007

China soy traders bearish on ample supplies

Chinese soy and grain traders possess a bearish outlook for their markets, as the government tries to curb rising food prices, a survey showed.

Flour makers in major wheat growing areas were confident about ample wheat supplies in the future, after Beijing increased auctions from reserves to 3.5 million tonnes as of this week.

As a result, wheat prices fell marginally, according to China National Grain and Oils Information Centre (CNGOIC).

The centre said that falling prices and increased government releases would brush off the farmers' and traders' hopes for better prices. Ample soy imports have cut prices of soy, soymeal and soy oil, and dampened interest in new import orders.

China ordered more than 3 million tonnes of US soy in November, CNGOIC estimated, which means imports will stay strong for the next few months.

In October, 2.8 million tonnes of soy was imported by China, 27.3 percent higher than a year earlier, according to official custom data.

Meanwhile, traders' outlook for the corn market remained mildly bullish, although it was a bit dampened by increasing corn supplies to arrive in consuming areas.

The state reserve plans to sell 500,000 tonnes of corn from its stocks next week.