November 24, 2008

 

China's soy oil market should stay strong next week amid robust demand, although a large amount of imports have arrived this month, according to a survey by an official think-tank.

 

The China National Grain and Oils Information Centre (CNGOIC) said in a report that most soy oil imports in November would go for state reserves, which would not have any impact on the market.

 

The outlook for the soy market weakened as China's interest in buying imported soy declined. Soy purchases for state reserves were expected to continue supporting domestic soy prices, which remained higher than imported soy prices, it said.

 

The outlook for soymeal stayed weak, and demand was expected to fall below normal levels.

 

CNGOIC said that there is still room for soymeal prices to slide further and that the market was expecting prices to fall below RMB 3,000 per tonne due to sluggish demand from feed mills.

 

The corn market ticked up on a smaller supply from farmers, which have not been able to sell large amounts of the grain to the market partly due to snow in the northeast.

 

Prices offered by state reserve purchases in the north east at RMB 1,500 per tonne, much higher than market prices, causing farmers to balk at selling their harvest to processors at lower offering prices.