SINGAPORE (Dow Jones)--Soybean prices in China's major producing regions
remained little changed in the week to Friday, with high inventories of soyoil
limiting demand from crushers, traders and analysts said.

  Activity was also muted due to widespread expectations that the government
will eventually subsidize purchases of soybeans from state reserves by
crushers, to make room in warehouses for the new harvest.

  Soybean prices in Heilongjiang, China's top producing province, were around
CNY3,600 a metric ton, little changed from a week earlier.

  "The high inventory level (of soybeans in state reserves) has been and will
continue to weigh on prices, and market participants widely expect the
government to roll out measures to bring it down ahead of the new harvest in
October," said Tu Xuan, an analyst with commodities consultancy Shanghai JCI.

  "You can't buy new beans, if the warehouses are full," Tu said.

  Chinese government sold 10,006 tons of soybeans from its reserves in an
auction Wednesday, which was only 2.1% of the volume offered.

  The latest data from shippers showed that high domestic stocks and sliding
futures have finally begun to cut Chinese imports of soybeans. Arrivals in
August are estimated around 2.6 million tons, down from an earlier estimate of
2.8 million tons and average monthly arrivals of 3.78 million tons in the
January-July period.

  Relatively high prices of beans and low prices of soymeal and soyoil have
made crushing operations unprofitable, and that has kept processors on the
sidelines, analysts said.

  Soymeal and soyoil prices were also stable in the week.

  Soymeal prices were mostly quoted around CNY3,400/ton, while first-grade
soyoil prices were around CNY7,300-CNY7,500/ton.

  "Crushers mostly have very high inventories of soyoil, and some have planned
to suspend operations in September, simply because there will be no room for
more products," said a trader in Heilongjiang province.

  Demand for soymeal is relatively good, however, as preparations for a
week-long holiday at the beginning of October has led to growing consumption of
feedmeal.