November 29, 2006

 

Asia Soybean Outlook: Premiums may rise on CBOT strength

 

  

Premiums for soybeans delivered to Asia may rise in the week ahead as Chicago Board of Trade soybean futures remain technically strong, and will likely continue their gains.

 

Out of the last seven sessions on CBOT, soybean futures settled higher in six sessions.

 

In Asia, China - the world's largest soybean importer - may keep its current modest volumes of soybean imports for the next few weeks.

 

"Import arrivals in Chinese ports have been quite high over the last few weeks. This has damped enthusiasm for booking fresh soybean import orders," said a trader with a Beijing-based state-run grains trading firm.

 

The trader said the rising CBOT soybean premiums are also discouraging Chinese traders to book soybean import shipments.

 

At present, the premium for soybean delivered to China from the U.S. is 165 U.S. cents/bushel to the CBOT January contract.

 

However, traders said some importers in China's Fujian province have booked a few cargoes of South American soybean at a lower premium of 140 U.S. cents/bushel to the CBOT May contract.

 

China's soybean imports in October rose 18.3% on year to 2.25 million metric tonnes, the General Administration of Customs said Monday.

 

In the January-to-October period, soybean imports rose 9.6% to 23.50 million tonnes.

 

In China's domestic markets, soybean prices continue to rise sharply, largely led by gains in domestic soy oil prices.

 

Analysts said that domestic soybean prices in China may continue to increase in the long term, largely led by increased demand for soymeal from the pork and poultry sector, besides higher soy oil demand.

 

In import deals this week, Nonghyup Feed Inc bought 55,000 tonnes of optional-origin soymeal from Cargill at US$259.93/tonne in a tender.