News
22.06.2009
China seen selling soya reserves in July, August
Chinese crushers did not increase soya imports much this week, anticipating ample supplies until August when a possible release of state soya reserves could make up for lower imports, according to an official think-tank.
The expectation on state sales by the China National Grain and Oils Information Center (CNGOIC) was reflected in prices on the Dalian soya futures market, which failed to follow the strong gains at the Chicago Board of Trade over the past week.
"Imports in June will be huge while those for July and August will be lower, but the government can release its temporary reserves any time in the period, which is likely to keep sufficient supplies in future months," said the center in a report. The outlook for the soyaoil market remained bearish. Both futures and physical prices have fallen a lot, but trading stayed thin. Stocks at ports have increased a lot and crushers were expected to cut prices.
Demand for the cooking oil was expected to continue to fall amid ample supplies of rapeseed oil and palmoil, it said. Soyameal prices were weaker than in the previous seven-day period. Some merchants have begun to build up inventories but demand has not improved much.
The government is likely to delay sales of corn reserves to July, but sales of old stocks by granaries in the north-east under a rotation programme will boost supplies in late June.
Tight supply has driven prices up again in the north-east and north, but Beijing's increase of tax rebates on some corn products and the government stockpiling of pork was unlikely to drive up corn consumption. Wheat demand was seen holding steady in the coming two to three weeks. Sluggish sales of flour had led some plants to suffer losses, making them more willing to mill cheap new wheat.
The state grainaries have increased purchases of new wheat for state reserves, but that was still not expected to drive up prices in the coming month since many mills have no plans to buy large volumes amid a bumper harvest. The outlook for short-grain rice stayed bullish on tight supplies.
Reuters
