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Asia Grain-China slows rapemeal exports

SINGAPORE: China is likely to slow down rapeseed meal exports amid low domestic crushing margins, while it is expected to buy more soybeans after the Lunar New Year, traders said on Tuesday.

"(Chinese) oil prices are low and crushing margins bad," said a trader. "You could imagine probably export activity will slow down in rapeseed meal."

Traders said China had been selling rapeseed meal as it was crushing large amounts of the oilseed arriving mainly from Europe and Australia in December and January.

With a price of around $75/$76 per tonne, fob China, for March shipment, more Chinese rapeseed meal is being shipped to South Korea as well as Europe, they said.

Yet some traders said a combination of bad weather and the nearing of the Lunar New Year celebration early in February had already caused delays in shipments of rapeseed meal in Nantong.

In addition to low edible oil prices in China, which should slow down crushing of rapeseed, the beginning of the country's season for aqua culture in March or April should further trim the amount of rapemeal available for export, they said.

Traders said China had bought more rapeseed recently for January/February for $215/$216 from either Europe or Australia, but the small crushing margins should also dampen appetite for imports of rapeseed that yields more oil than soybeans.

"I would say buying (of rapeseed) will continue. Yet they probably will keep more attention to the crushing margins before making any big decision," said another trader.

CHINESE CORN PREVAILS

In the corn market, traders said, heavily subsidised Chinese corn was heading for all Asian importing countries, snatching market share from US rivals following the latest Chicago rally.

"You can't really rule out any market here," said the second trader, referring to buyers of the Chinese product in the region.

He said South Korea, Japan, Malaysia, Thailand, Indonesia, Vietnam and Sri Lanka had all signed deals.

However, traders agreed China might raise export prices at $100, fob China, narrowing the price difference with US competitors which now stood at around $120, C&F Southeast Asia.

The first trader said: "US looks very uncompetitive now. Everybody would just buy Chinese. But I don't know if Chinese are going to keep the prices or try to narrow the gap."

CHINA SEEN RESUMING SOY IMPORTS IN FEBRUARY

Traders said Chinese importers of soybeans had been sidelined after the recent Chicago rally, which raised prices for US soybeans to around $220 per tonne, C&F Chinese port, well above a threshold of $200 they were seen willing to pay. But they said China was likely to resume purchase of soybeans after Lunar New Year celebrations on February 5 and that supply of domestic beans harvested in November should also tighten.

"Chicago jumped and Chinese importers are left behind, but I suspect they are going to catch up somehow," said the first trader. "They need to import more soy to keep crushing plants going. Supply out of domestic beans should tighten a bit."-Reuters