China soy imports strong on high crushing margin

Chinese crushers have purchased as much as 1.5 million tonnes of soybeans in the first half of this month as crushers stepped up imports on rising domestic prices of soy products, according to an official survey Crushing margins for soy plants have hit "the highest level" due to surging soymeal and soyoil prices ahead of the Lunar Chinese New Year, the China National Grain and Oils Information Centre (CNGOIC) said in a report.
China purchased 861,800 tonnes last week - its largest purchase of US soybeans in a single week since June. "Chinese imports were expected to remain at a high level in coming weeks," said the center. Tight soymeal supplies had pushed up prices in the week, and they were expected to keep rising. Crushers in coastal areas were running at a lower capacity due to strict quarantines and a delay in shipments, it said.
But high soymeal prices have bit into demand, which would decrease as merchants were not active buyers at such high prices, according to the report. "As feed mills and merchants have completed stockpiling ahead of the New Year holidays, soymeal demand is likely to decline, which may lead the price to fall by a big margin," it said.
Soyoil market softened as the government's release of soyoil reserves in some areas has effectively increased supplies. Merchants have finished building up stocks ahead of holidays and trade of soyoil was thin. Demand in the coming weeks was expected to continue falling, though consumption has remained high ahead of the holidays.
The corn market turned bullish for the first time in months as the government's purchases for reserves in the north-east provinces shored up prices. Traders and processors were still not active buyers in the market, leading to a tight supply of corn at ports.
Corn prices in the north and in major consuming areas in the south picked up as feed mills were building inventories, but actual consumption remained weak. Wheat market weakened as flour sales remained low. The government is likely to raise bidding prices at its weekly wheat auctions, but flour mills were seen not active in bidding. Short-grain rice market stayed strong supported by state purchases and rising demand ahead of the holidays.