May 24, 2004
Imbalance in China's Soybean Demand & Supply Situation: A Look at China's Demand for Imported Soybeans in 2nd Half 2004
An eFeedLink Special Report
Below is an abstract of the report: Imbalance in China's Soybean Demand & Supply Situation: A Look at China's Demand for Imported Soybeans in 2nd Half 2004
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Following the recent sharp fall in US soybean futures prices, China's Dalian Commodity Exchange soybean futures have on three occasions hit limit-down shutout. Market analysts pointed out that the plummeting futures prices in Chinese and overseas markets are largely associated with a fundamental change in the supply / demand relationship.
Although current global soybean supply turning for the better, the market demand for the commodity has continued to weaken in recent period. Coupled with this, the withdrawal of US funds from soybean market is likely to drive soybean prices downward in the global market in the longer term.
China is the largest soybean importer in the world. Its soybean demand plays a key role in propping up global soybean prices. Its absence from the global soybean market will certainly lead to a softening in soybean prices globally. In its report for the month of May, USDA forecast that China would import 20.25 million tons of soybeans during 2003/04.
Nevertheless, the import figure is unlikely achievable based on the current market situation in China. The Chinese government's macro-economic control, which is implemented in its bid to slow down the country's economic growth, is expected to reduce its market demand for imported soybean.
More contents in this 4-page report include:
- Supply from Last Season US Soybean Reserve Remains Tight; High Price Levels Curtail Demand
- Favorable Weather Conditions in US Midwest Augur Well For New Season Soybeans
- Macro Economic Control Seen to Reduce China's Demand for Imported Soybeans in The 2nd Half Of 2004
- Withdrawal of Funds from The US Soybean Market
- Conclusion
