May 29, 2007

China soyoil futures reach new highs

Dalian soyoil futures closed at all-time highs on Monday (May 28), thanks to strong gains at the Chicago Board of Trade.

The most active Dalian September contract closed at RMB 7,844 yuan (US$1,026) per tonne, up 3.5 percent from Friday. The contract has gained 13.6 percent since early May.

Chicago soyoil spot prices Friday reached a near 23-year high as palm oil futures closed 2.2 percent higher overnight after hitting a nine-year high on firm exports.

Low production at domestic crushers in April due to sluggish soymeal demand had prompted Chinese consumers to source soyoil abroad.

China's soyoil imports rose 64.9 percent in April to reach 211,233 tonnes, and analysts expect the high volumes to continue in May.

Besides soyoil, China also imported 19,051 tonnes of rapeseed oil in April after tight domestic supply pushed prices near-record levels.

Soyoil prices were expected to stay strong until crushers step up production in expectation of greater soymeal demand from the recovering feed industry, analysts said.