China's robust demand to lift CBOT soy prices

China's robust demand for US soy, evident in a rise to 15.7 million bushels in American exports of the oilseed last week, looks set to continue while its processors attempt to fill a void in soyoil supplies left by import curbs.

With US stocks of the oilseed limited, prices should "therefore be taking a run at the US$10 a bushel mark soon", the German bank said.

Chicago's near-term soy contract, currently May, has not stood above 10 bucks a bushel since January 11 - the day before a momentous USDA crop report sent grain and oilseed prices tumbling across the globe.

However, Commerzbank also warned that the slide in soyoil imports compelling Chinese producers to ramp up their own production may not last too long.

China's soyoil squeeze stems from a decision to bar imports from Argentina, the world's biggest exporter of the vegetable oil, ostensibly on food safety grounds. Many observers believe, however, the restrictions have been put in place after Argentina imposed anti-dumping duties on some Chinese imports.

"The two countries are dependent on one another," Commerzbank said. "For Argentina, soyoil exports are a key source of income, while China purchases three quarter of its soyoil imports from Argentina and is likely to have difficulties in covering this demand elsewhere."

China is reported to be considering a loosening of its soyoil purity restrictions at the heart of the trade curbs, while Argentina has pledged to reduce levels of solvent impurities.