October 26, 2011

China's soy auction attracts no bids

China was not successful in selling any of 309,859 tonnes of reserve soy it offered at an auction on Tuesday (Oct 25), according to the China National Grain and Oils Information Centre.

This was the 22 batch of state soy reserves put under the hammer since December of last year. However, the government only sold out 16,100 tonnes of the total 6.57 million tonnes of soy from reserves at those auctions.

The reserve soy lost appeal as traders paid more attention to new soy. Meanwhile, the floor price of RMB3,960/tonne (US$623) at the auction was not competitive compared with new soy.

It is now the marketing season for new soy, with the purchase prices in the range of RMB4,000-4,100/tonne (US$629-645).

Analysts say that the bimonthly reserve soy auction, usually ending up in failure, has a small impact on the market though it serves to send a signal of stabilising prices.