Chinese importers have canceled orders for about 600,000 tons of US soybeans, an official think-tank said on Friday, as weak domestic demand and a recent drop in prices made these purchases unprofitable.

The cancellation of cargoes by China, the world’s top buyer, will weigh on Chicago futures which have already dropped more than 20% since hitting a record high of US$17.94-3/4 a bushel on Sept. 5.

The China National Grain and Oils Information Center (CNGOIC) did not say when the orders, equivalent to 10 cargoes, were canceled but said they were for delivery in December and January, indicating that they had been booked long before the recent drop in prices.

“Crush margins in China are under pressure. Prices have come down significantly from the highs and beans that were bought when prices were US$2 or US$3 (per bushel) higher may not work in the current product price environment,” said Anne Frick, oilseeds analyst with Jefferies Bache.

Source: Business Times Nov 2012

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