January 8, 2007

 

Asia Grain Outlook on Monday: Corn, wheat premiums evenly poised

  

 

Premiums for wheat and corn delivered to Asia may move either way in the week ahead, as traders in the U.S. await key crop data to be released by the U.S. Department of Agriculture Jan. 12.

 

Last week, U.S. corn and wheat futures were quite choppy, falling sharply midweek mostly because of overall weakness in commodities, before recouping some losses Friday.

 

Soybean premiums may fall this week, amid favorable weather conditions for the South American soybean crop and an expected outlook for higher production and stocks data for the U.S. soybean crop in this week's USDA crop report.

 

In Asia, Singapore-based traders said Asian grains buying may remain muted over the next few weeks.

 

"Right now international grains prices are quite stable though still at a high level. Buying is likely to emerge once prices start coming down for corn, wheat and soybeans," one trader said.

 

Traders speculated that prices may fall slightly over the course of the next few weeks in response to certain market indicators such as the declining price of crude oil.

 

Some traders felt that in addition to high prices, it was also just too early in the year to make significant purchases.

 

"It is only the first full week of 2007, and traders in Asia are in no hurry to buy unless a better idea of how demand is likely to build through the year emerges," another trader said.

 

In other news, India's wheat plantings in Oct. 1-Jan. 5 were estimated at 27.5 million hectares, up from 25.8 million hectares in the year-earlier period, the Ministry of Agriculture said last week.

 

The plantings so far have already surpassed last year's total area planted to wheat of 26.6 million hectares.

 

Farmers in India have shifted toward planting grains and pulses instead of oilseeds in anticipation of higher incomes.

 

Significant gains in wheat plantings of more than 1.5 million hectares from the year earlier have been made in nontraditional regions such as the western province of Gujarat, which is better known for growing peanuts. In more Indian agriculture news, lobby group Soybean Processors' Association of India said Friday that the country total soymeal exports in December were 615,028 metric tonnes compared with 539,240 tonnes during the same month last year.

 

Indonesia was the biggest importer of Indian soymeal in December, buying 111,960 tonnes, followed by South Korea at 91,766 tonnes.

 

In China, the federal government sold 527,800 tonnes of wheat in five provinces through public auctions last Friday, with prices ranging from RMB1,400-RMB1,570/tonne.

 

The auctions were part of the country's regular sales of wheat bought by the state warehouses under the minimum purchase price policy last year.

 

China will hold an auction Wednesday to sell around 750,000 tonnes of wheat.

 

More than 5 million tonnes of wheat has been sold through public auctions since November.