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December 22, 2008

 

China to keep importing soy on lower prices

 
 

Soy crushers in north China are expected to import more soy despite a pickup of Chicago Board of Trade prices as domestic soy remained expensive.

 

The China National Grain and Oils Information Centre (CNGOIC) said in a report that crushers will not shift to domestic soy unless US futures prices rise to more than US$9.80 per bushel.

 

Chicago prices were at US$8.62 per bushel on Thursday (December 17).

 

China, the world's top soy importer, bought most of the weekly sales of US soy last week.

 

The soyoil market was weak as purchases did not pick up before the holidays as earlier anticipated. Merchants were not stocking and demand was unlikely to rise dramatically in coming weeks, it said.

 

On the other hand, soymeal market went up as feed mills are building inventories and prices in some areas have picked up slightly.

 

CNGOIC said soymeal demand in the short term may not increase by a big margin but will remain stable.

 

The corn market also weakened last week as farmers have stepped up sales of their harvest. The government said they are trying to create policies to prevent corn prices from its continual decline, without elaborating.

 

The wheat market is also seen weak this week as flour sales were not as strong as expected but is expected to pick up next week.

 

US soft red wheat arriving China was cheaper, but a small amount of imports would not have any impact on the market.

 

However, lesser imports US hard red winter wheat are seen prices remain higher than the best quality domestic wheat, according to CNGOIC.

 

The centre gave the following index data.

  

 

Dec 17

Dec 10

Dec 3

Soy

53.10

53.80 

52.50

Soymeal

52.00

51.00

49.00

Soyoil

51.70

55.00

53.30

Corn

42.60

43.10

46.70

Wheat

54.30

57.10

56.70

Rice

49.40

50.00

50.60

 

A reading below 50.0 indicates participants are bearish, a reading of 50.0 indicates they are neutral and a reading above 50.0 indicates they are bullish.

 
Source: Marketing Monitoring Division, CNGOIC.
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