China soyoil demand rises ahead of holidays-survey

BEIJING, Aug 14 - China's demand for soyoil, the staple cooking oil in the country, is picking up as merchants start building up inventories ahead of holidays in October, but soy imports are likely to stay steady, an official survey showed.

Physical soyoil prices rose 5 percent this week as merchants purchased supplies to build up inventories for the week-long holidays, but ample supplies will restrain rises.

Soy buyers are not keen to book expensive near-month cargoes on the Chicago Board of Trade while purchases for forward-month contracts are expected to remain steady, the China National Grain and Oils Information Centre (CNGOIC) said in a report.

Soy supply will be sufficient despite low imports in August and trading of imported soybeans slowed down this week amid quotations remaining steady at ports, it said.

Trading of soymeal was thin this week after prices saw a marginal increase last week. Crushing margins have improved, which will lead more soy plants to raise production and increase meal supplies.

Government sales of corn reserves have stabilised prices and there is a lower possibility that prices will climb or fall too much before the new harvest in a month's time.

Flour mills expected sales to improve in coming weeks. The government has stopped buying wheat from the market in Shandong and Henan province, which will boost wheat supplies in the market.

Short-grain rice stayed bullish due to tight supplies. Supply from Jilin province in the northeast has dried up ahead of the new harvest in two months.

The centre gave the following data:

Aug 12 Aug 5 July 29

Soybean 48.9 50.6 50.0

Soymeal 45.8 49.0 46.1

Soyoil 54.2 54.2 46.7

Corn 51.2 51.4 54.0

Wheat 50.5 51.0 50.0

Rice 69.4 66.7 64.4

Notes: A reading below 50.0 indicates participants are bearish, a reading of 50.0 indicates they are neutral and a reading above 50.0 indicates they are bullish.

Source: Marketing Monitoring Division, CNGOIC.

NOTE: The indexes are based on data collected from 400 market participants, including storage firms, oilseed processors and traders in China's 17 major producing and consuming provinces.

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