China soy buyers hold off ahead of supply, survey shows
Distributed for the U.S. Soybean Export Council by John C. Baize and Associates
BEIJING, Dec. 10 – China’s purchases of imported soybeans slowed as buyers anticipated a possible weakening in international prices ahead of a big South American crop and large arrivals in coming months, an official survey shows.
“Some market participants expect international soy prices could fall for a short period, which has affected their interests for more imports,” the China National Grain and Oils Information (CNGOIC) said.
Beijing's subsidies to some crushers in the northeast have also lowered the cost of crushing domestic soybeans. Some will hold off on imports before the South American soy harvest.
The subsidies to crushers in the northeast have spurred purchases of domestic crops by these plants, which has boosted production.
Rising domestic soyoil and soymeal prices gave soy plants better crushing margins in November, or as high as 520 yuan ($76.16) per tonne, though the margins will narrow in December and January because of large soy arrivals, it said.
Soy imports in January could reach between 4 to 4.5 million tonnes, in addition to even higher imports this month, or between 4.6 to 4.8 million tonnes, the highest monthly import volume.
The soyoil market will stay strong due to a build-up in inventory by merchants ahead of the Lunar New Year which falls in February.
However, the soymeal market will likely turn weak as many soy plants have lowered their December and January prices.
The corn market turned strong after tight railway transport capacity delayed supplies in consuming provinces in the south.
Processors in the northeast raised purchase prices to ensure enough corn, supporting local prices.
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