December 27, 2010

China's Harbin soy auction fails to attract bids

The Harbin National Grain Trading Centre did not manage to sell any of the 191,000 tonnes of soy reserves offered at an auction Friday (Dec 24), said analysts.

Unlike edible oils and other grains, demand at state soy auctions has been weak. As crushing margins decline on government measures to roll back food price increases, the last two Heilongjiang soy auction attempts failed to attract any bids.

The beans on auction Friday, which were from 2008 stocks, were to be sold at a floor price of RMB3,750/tonne (US$566).

"The price is fairly competitive, especially considering that US soy prices are rising, but it's possible that soy crushers' margins are still low and they are in a defensive mode," said Huang Yinyan, a soy analyst for Nanhua Futures.

Soy crushing margins have fallen by about two-thirds in the last two months, amid reports of cooking oil producers suspending production.

Heilongjiang province, home to the city of Harbin, has planned to release 630,000 tonnes of soy since December 3, but so far sold only 55,000 tonnes.