December 7, 2005


Asia Soybean Outlook: Premiums may rise; CBOT, China demand



Premiums of soybean delivered to Asia may rise marginally in the week ahead, boosted by gains in U.S. soybean futures on the Chicago Board of Trade in the week to Wednesday and stronger demand from China.


"I think soybean premiums are going to improve in the next few weeks. Prices are bottoming out," said a trader in Seoul.


U.S. soybean futures ended higher most days in the week to Tuesday, pushed up by talk in the market of buying interest from China and bullish technical trends.


However, gains in U.S. soybean futures may be limited because they are mostly being supported by technical trends, analysts warn.


However, over the past week China's soybean imports have picked up slightly, analysts said. The rise in demand comes amid bird flu worries that have cut poultry consumption in China and damped the country's demand for soybean and soymeal.


According to, a Chinese commodities information provider, the country may import up to 2 million metric tonnes of soybeans this month.


Premiums may be well supported if China maintains its purchases of soybeans at current levels.


Rising barge freight rates in the U.S. will also likely support premiums of soybeans delivered from there, as cold weather is causing ice to form on rivers and slowing down barge traffic.


China Domestic Soybean Prices Lower


In major deals this week, South Korea's Major Feedmeal Group bought around 87,000 tonnes of Indian soymeal from various trading houses such as Noble, Adani, Cargill and Peter Cremer.


Prices for all these shipments varied between $217/tonne and $220/tonne, cost and freight.


Last week, South Korea's Nonghyup Feed Inc. bought 25,000 tonnes of Indian soymeal from Bunge, a trading house.


The Kaohsiung branch of Taiwan's Breakfast Soybean Procurement Association last week bought 60,000 tonnes of U.S.-origin soybeans from trading house Agrex.


While 20,000 tonnes were purchased at $259.50/tonne, C&F, the remainder will be bought at a premium of 157.25 U.S. cents a bushel above CBOT's March contract.


Meantime, soybean prices fell in China in the week to Friday.


In Harbin, the capital city of China's largest soybean-producing Heilongjiang province, prices were quoted at RMB2,350-RMB2,380/tonne, lower from RMB2,380-RMB2,400/tonne a week earlier.


In other news, the Indian unit of AWB Ltd. (AWB.AU) has said it is interested in exporting oilmeal from India to countries like Indonesia.


The unit operates four oilseed-crushing plants on lease in the southern Indian states of Andhra Pradesh and Karnataka, as well as the central Indian state of Madhya Pradesh.


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