October 10, 2003
China Soybean, Soymeal, Soyoil Prices Surge to New Highs
China's soybean product markets surged to new highs in the first week after a week's long national holiday, due to reduced crush operations amid concerns over shortage of total soybean supplies, traders and analysts in China told OsterDowJones Thursday.
The gains come in the face of ongoing harvest pressure.
"The soybean and product markets in China are now on fire, fuelled by the concerns over raw material supply shortage. The firmness of new-crop soybeans as well as imported soybeans also helped to strengthen the bullish atmosphere," a trader from a Hong Kong based oilseeds company told OsterDowJones Thursday.
In Harbin, Heilongjiang province, the procurement prices of new-crop soybeans shot up to 2,500 yuan ($1=CNY8.277) a metric ton, about CNY200 higher than the initial procurement prices. The landing cost of imported soybeans at Chinese the ports also surged to about CNY3,000/ton, due to high freight costs and rising Chicago Board of Trade soybean prices, traders said.
Reserved farm selling did little to cool the markets, added the traders.
Although farmers in northeastern China are harvesting soybeans, they are reluctant to let go of their crops, eyeing higher farmgate prices in the coming days.
"It is very difficult to source new crop soybeans in northeastern China.
"There are just very few offers from producers," a trader and analyst from a local brokerage house in Dalian commented.
Last year, many soybean producers missed big profits when the markets posted a late rally as farmers already sold their crops.
"This year, the farmers want to hold their crops as long as possible, looking for a higher return, because they know there are simply many inquiries from crushers as well as traders all over the place, let alone the speculative buying from the futures market participants," the Dalian based trader said.
Soybeans are planted in May and harvested in October in China. This year, the soybean output is forecast to be in the range of 16.30-16.60 million tons, according to figures from different agencies.
In comparison, the U.S. Department of Agriculture noted China harvested 16.51 million tons of soybeans in the previous marketing year.
SOYMEAL & OIL SURGE ON CURBED CRUSH OPERATION
Meanwhile, Chinese soymeal and soyoil prices also increase significantly, as many crushers are forced to curb their crush operation, traders said.
"Many large crushers have already ceased to provide quotes of soymeal this week, because of the uncertainties around the supply of raw materials. No imported soybeans have arrived at the ports in China after Sept. 20," the trader from Hong Kong company said.
Soymeal quotes from a large crusher in Jiangsu province stood at CNY2,580/ton on Thursday, about CNY100/ton higher compared with the prices in late September. In other parts of China, the available crushers soymeal crushers gained about CNY100 over late September prices.
