China buys U.S. soybeans
China bought six cargoes, equivalent to around 500,000 metric tons, of soybeans from the U.S. Tuesday to replenish state reserves, two executives familiar with the matter said Wednesday.
The buy takes the state stockpiler's total soybean purchases to 60% of a target set by the government earlier this year of 2 million tons. The stockpiler, China Grain Reserves Corp., or Sinograin, bought 700,000 tons of soybeans in early October, traders said previously.
Sinograin will likely buy more soybeans if prices on the Chicago Board of Trade fall below $12 a bushel, said one of the executives, who work at a state-owned grain processing and trading company .
Sinograin "will not consider U.S. soybeans if CBOT price is higher than $12," the executive said.
CBOT January soybean contract traded around the $12 mark Wednesday in electronic trading during Asian trading hours after settling at $12.0025 overnight.
Calls to Sinograin weren't immediately answered.
The stockpiler has recently become an active buyer of global grains and oilseeds, due partly to the need to replenish its depleted reserves and also due to attractive prices of commodities on the international market amid concerns over a potential global economic downturn.
U.S. soybeans at $12/bushel is equivalent to around CNY3,900/ton on a cost-and-freight basis at Chinese ports, much cheaper than domestic soybeans at CNY4,100-4,200/ton, analysts said.
Sinograin in May confirmed that it had purchased 1 million tons of corn from the U.S. it had booked in March for state reserves.
After the deal, the company is said to have bought more corn from the U.S. in July and early October, when CBOT prices were low, though it hasn't confirmed any such deals.
China will likely buy about 5 million metric tons of corn from overseas suppliers in this marketing year, the state-backed grain analyst the China National Grain and Oils Information Center said previously.
-Zhoudong Shangguan contributed to this article; Dow Jones Newswires; (8610) 8400 7715; firstname.lastname@example.org
(END) Dow Jones Newswires
November 16, 2011 04:05 ET (09:05 GMT)