Asia Grain Outlook on Monday: China expects more U.S. soy arrivals
China will likely continue a recent uptrend in soy imports that, combined with strong U.S. export data, should keep prices well supported.
Analysts said the focus is turning back to soy' bullish fundamentals, after Asian financial markets staged a rebound Monday from Friday's broad sell-off, reacting positively to the United Arab Emirates central bank's Sunday announcement that it would help banks weather the Dubai World debt crisis.
U.S. soy export sales in the week to Friday totaled 1.14 million tonnes, 23% higher than the prior four-week average, the Department of Agriculture said in a weekly report. Meanwhile, China's Ministry of Commerce last Monday forecast the world's biggest buyer's December imports at 2.95 million tonnes, higher than its revised estimate of November imports, at 2.86 million tonnes, and October imports of 2.52 million tonnes.
Traders said December imports could total nearly 4 million tonnes, noting that the ministry's forecast is based on reports from buyers, and doesn't account for all shipments. China imported 3.30 million tonnes of soy last December.
With the U.S. harvest wrapping up and no other nations currently competing for export sales, strong Chinese buying could keep soy prices in a relatively high US$10.50-US$11.00-per-bushel range, Okato Shoji Co. commodities analyst Koname Gokon said.
Soy for January delivery at the Chicago Board of Trade settled down 1.5 cents at US$10.53/bushel Friday. At 0718 GMT, the contract was at US$10.65 on e-CBOT, up 12 cents.
Meanwhile, as domestic soymeal and soyoil prices rose in China over the past week, crushers using imported beans realized higher profit margins, which will encourage further buying, the China National Grain & Oils Information Center said in a weekly report released Friday.
However, some Chinese analysts noted that if CBOT soy prices keep rising, some crushers could turn away from imports in favor of domestic soy.
China said last week it would start buying soy from the new harvest, from Dec. 1 to April 30, at RMB3,740 (US$548) a tonne, and it will give a subsidy of RMB160/tonne to some crushers in northeastern growing areas who are willing to pay farmers between RMB3,740 and RMB3,840/tonne.
The average price of arrivals last week was RMB3,700/tonne, according to the CNGOIC.