July 19, 2011

 

Monday: China soy futures settle higher on rising soymeal demand

 
 

Soy futures on the Dalian Commodity Exchange closed higher Monday (Jul 18), led by gains in soymeal, on the back of growing demand for the animal feed raw material as Chinese farmers expand hog production amid high pork prices.

 

The most actively traded May soy contract settled at RMB4,664 (US$721)/tonne, up 0.1%.

 

The market was abuzz with fresh talk of a possible state sale of around four million tonnes of soy to major edible oil makers - in exchange for a pledge to keep oil prices stable - which capped further gains.

 

China's monthly crushing demand is about five million tonnes.

 

"The downward pressure [on soy prices] will be eased after the government sells its stocks," analysts said.

 

"The [soy] market will receive its strongest push in the fourth quarter, when demand will go up," they added.

 

Hog inventories rose for a fourth consecutive month in June, data from the Ministry of Agriculture showed. Production had languished for a year before recovering in March.

 

Chinese feedmills consumed around 35 million tonnes of soymeal last year, an increase of 13% on-year, the ministry said earlier.

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