Chinese Govt To Start Buying Soybeans/Corn

Having recently announced the suspension of it's weekly soybean and corn auctions, the Chinese government has now said it will begin buying supplies of both from domestic producers beginning Dec 1st.

It will buy soybeans at the equivalent of 3,740 yuan/tonne (around USD548) and corn at around 1,500 yuan/tonne (USD220), in a program set to run until the end of April says the government-backed China Oils Network website.

Although both levels are close to where domestic prices have been running of late, effectively the move puts a floor in the market. That should be supportive for both Chinese and US soybean prices.

The average price for imported soybeans this month has been running at around 3,700 yuan (USD542).

Chinese soybean futures for the most active month September 2010 closed 1.9% higher Thursday at 3,960 yuan.