July 14, 2008

China market bearish on soy, bullish on wheat

China's soymeal traders expect the market to weaken in the near term while grain prices remain strong on healthy demand, a survey by an official think-tank showed on Friday (July 11, 2008).

A drop in Dalian futures prices earlier in the week had led many feed mills to wait before signing new contracts, the China National Grain and Oils Information Centre (CNGOIC) said.

Soyoil outlook suffered as well as traders were reluctant to rebuild inventories after earlier losses.

Poor demand for soyoil meant lesser demand for imported soy.

The corn market was expected to stay strong on higher prices offered in the northeast as well as in Shandong, which has the country's highest poultry population and number of corn processors.

The wheat market outlook stayed bullish as demand from flour mills remained strong as wheat bran prices hit four-year highs.

Flour mills expected more supplies of new wheat to slow the price rise.