Imports of US soybeans to China reached the weekly highest level in the month as Beijing's purchases of state reserves drove domestic prices up above US soy prices, a survey by an official think-tank showed on Friday.
Government buying in China's north-east carried domestic prices to 3,700 yuan ($541.1) per tonne, more expensive than imports, according to the survey by the official China National Grain and Oils Information Centre (CNGOIC). "As foreign and domestic soybean prices invert, domestic firms' demand for imports will continue increasing in coming weeks," the report said.
Soy oil prices rose in the northeast in line with higher soybean prices there due to government purchases, though prices were stable elsewhere in China. The report predicted higher demand for soy oil in coming weeks as refineries shift away from palmoil on cooling weather. The soymeal market strengthened as feedmills moved to fill their inventories this week as a cutback in production by crushers helped raise meal prices. Demand for meal is likely to rise in coming weeks, the report predicted. Surveyed mills were bullish on wheat but did not expect significant change in prices before the Lunar New Year next year.
The rice market suffered amid low demand and concern among buyers that prices could fall after the government's purchases. Beijing has agreed also to buy rice for state reserves, but has not detailed amount and prices.
A large amount of new corn has not reached the market, keeping corn prices steady. Prices in the north-east were seen keeping strong supported by Beijing's purchase plans, but the prices, artificially boosted by the government, would not reflect demand elsewhere. Corn prices in the north would stay weak for some time as farmers were reluctant to sell their harvests while purchases by processors were also thin.
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