Asia Grain Outlook on Monday: Prices rise on dollar; USDA reports awaited

 

 

Grains futures rose Monday with help from a weaker U.S. dollar, as market participants waited for Tuesday's reports by the U.S. Department of Agriculture with its latest supply-and-demand tables and production forecasts.

 

Benchmark March wheat futures traded on the Chicago Board of Trade hit a five-week high at US$5.72 a bushel at 0740 GMT, up 0.6%. Benchmark CBOT soybean futures were up 0.6% at US$10.28/bushel.

 

The Dollar Index, a gauge of its value against a basket of currencies, fell 0.6 percent Monday.

 

The USDA reports to be issued Tuesday are expected to draw a baseline for prices.

 

Analysts' average estimates for total U.S. winter wheat plantings are at 40.501 million acres, down from 43.311 million acres a year ago, Alan Brugler, president of Brugler Marketing & Management, said in a newsletter Friday.

 

Grains and the soybean complex have also become net beneficiaries of the index rebalancing process, and the soybean complex is expected to see even more significant purchase than previously estimated, Standard Chartered Bank said in a report last week.

 

Meanwhile, China's General Administration of Customs said on Sunday that the country's soybean imports hit a record in December of 4.78 million tonnes, up 45% from a year earlier.

 

Some analysts said Chinese buying from the U.S. is likely to slow as the South American crop will soon be available, but investment demand for commodities will continue to support prices.

 

"(Supply-demand) fundamentals' role is getting smaller in deciding commodities prices nowadays, the big picture is about the need to hedge inflation," said an analyst at a major global commodities trading house in Beijing.

 

Recent snowfall and freezing weather in northern China should have a very limited impact on the wheat crop, as major growing regions were not seriously affected by the extreme weather conditions, he said.